Q. Which of the following statements is/are NOT correct about “Cash Management Bill (CMB)”?
1. It is a short-term instrument issued by government to meet the temporary cash flow mismatches.
2. These are issued for maturities less than 91 days.
Select the correct answer using the code given below:
Answer: D
Notes:
The Government of India, in consultation with the RBI, decided to issue a new short-term instrument, known as Cash Management Bills, since August 2009 to meet the temporary cash flow mismatches of the government.
- The Cash Management Bills are non-standard and discounted instruments issued for maturities less than 91 days.
- The CMBs have the generic character of Treasury Bills (issued at discount to the face value); are tradable and qualify for ready forward facility; investment in it is considered as an eligible investment in government securities by banks for SLR.
Source: TMH Ramesh Singh
