Word of the Day: Treasury bill (T-Bill)

Treasury Bill is basically a short-term debt instrument of the Government of India.
This security bears no DEFAULT RISK and has a high degree of LIQUIDITY and low INTEREST RATE RISK in view of its short term. The instrument is negotiable and is issued at a discount from the FACE VALUE.
At MATURITY, the investor receives the face value and hence the increment constitutes the interest earned.

Two types of T-Bills were issued in India, by the Reserve Bank of India (RBI), on behalf of the government:

Ad-hoc T-Bills (or Ad-hocs) of 91 days maturity (which were non-marketable) to the RBI to replenish the Central Government's cash balance.
Ordinary T-Bills "on tap" that are taken up mainly by banks, for short-term investment or to comply with statutory requirements.