4.33 Treasury Bills:
Treasury bills are instruments of short-term borrowing by the Government of India, issued as promissory notes under discount. The interest received on them is the discount which is the difference between the price at which they are issued and their redemption value. They promise assured yield and negligible risk of default.
4.34 Fixed Income Securities:
Fixed-income securities are investments where the cash flows are according to a predetermined amount of interest, paid on a fixed schedule. The different types of fixed income securities include government securities, corporate bonds, debentures, etc.
Government Securities: G-Secs are issued by the Reserve Bank of India on behalf of the Government of India. G-Secs provide risk-free return to investors.
Corporate Bonds: Corporate Bonds are issued by public sector undertakings and private corporations for a wide range of tenors. Compared with government bonds, corporate bonds generally have a higher risk of default and hence the higher rate of return on these instruments.
Debentures: Debentures are instruments for raising loan by a Company.
Inter-bank Participation Certificate: Inter-Bank Participation Certificates are instruments issued by scheduled commercial banks only to raise funds or to deploy short term surplus.