CMB

Cash Management Bills 

👉In 2010, Government of India, in consultation with RBI introduced a new short-term instrument, known as Cash Management Bills (CMBs), to meet the temporary mismatches in the cash flow of the Government of India.

👉The CMBs have the generic character of T-bills but are issued for maturities less than 91 days.


👉Like T-bills, Cash Management Bills (CMBs) are also issued at a discount and redeemed at face value on maturity.

👉The tenor, notified amount and date of issue of the CMBs depend upon the temporary cash requirement of the Government.

👉The tenors of CMBs is generally less than 91 days.

👉The announcement of their auction is made by Reserve Bank of India through a Press Release on its website.

👉The non-competitive bidding scheme has not been extended to CMBs. However, these instruments are tradable and qualify for ready forward facility.

👉Investment in CMBs is also reckoned as an eligible investment in G-Secs by banks for SLR purpose under Section 24 of the Banking Regulation Act, 1949.

👉First set of CMB was issued on May 12, 2010.

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