treasury bills

Treasury Bills

Treasury Bills (T-Bills) are zero default-risk, extremely liquid money market instrument, issued by the government of Sri Lanka through the Central Bank of Sri Lanka (CBSL), to finance their short-term debt requirements and obligations. Having a higher degree of tradability in the secondary market, T- Bills also act as a benchmark for the short-term credit market.

T-Bills are auctioned on a consistent schedule, normally on a Wednesday of each week by the Central Bank for periods of 3, 6 & 12 months through a competitive electronic bidding system. Investors can place their competitive bids for the Primary auctions through CBSL approved Primary Dealers.

T-Bills are discount instruments as the investor gets its interest upfront. This means that the interest promised on a T-Bill instrument is payable on the very day the investment commences. For instance, if a one year T-Bill promises a 10.00% rate per annum and an investor wants to put in Rs.100,000, the investor pays only Rs.90,000 on the day of investment but gets back Rs.100,000 at maturity. The maturity value (Rs.100,000) is referred to as the face value while the initial investment (Rs.90,000) is referred to as the discount value.

Treasury Bill Rates

As of 2021-12-01
Duration Bid(%) Offer(%)
3 Months 7.4 7.15
6 Months 7.95 7.55
12 Months 8.45 7.75

FAQ

Can I borrow against my investment?

Yes. Any owner of a T-Bill can borrow against it by pledging it as collateral at a fixed rate. The borrowing period can be a lesser duration than the T-Bill investment period. The borrowing rate will depend on the market interest rate at that time.

Can I realize capital gains?

Yes. If the market interest rates drop below your purchase yield, an investor can realize capital gains by selling the T-Bill.

Will I get a certificate for my T-Bill investments?

All T-Bills are issued in scripless form without a paper certificate.

Can I transfer the ownership?

Yes. Ownership of a T-Bill can be transferred easily to another.

Can I place a bid for the Treasury Bill auction through you?

Yes. Our well experienced team will guide you and advice you based on current market and economic condition to ensure you receive the highest yield of acceptance.

Are the T-Bills interest income liable for WHT?

No. No Withholding Tax will be deducted from the earnings.

Are the T-Bills income liable for Income Tax?

Yes. If you are an income tax payer.

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