Treasury security is government debt issued by the govt. through Central Bank. Treasury securities are the debt financing instruments of the government, and they are often referred to simply as Treasuries. There are four types of marketable treasury securities: Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation Protected Securities (TIPS). There are several types of non-marketable treasury securities including State and Local Government Series (SLGS), Government Account Series debt issued to government-managed trust funds, and savings bonds. All of the marketable Treasury securities are very liquid and are heavily traded on the secondary market. The non-marketable securities (such as savings bonds) are issued to subscribers and cannot be transferred through market sales.
Treasury bill also termed as T bill and it is backed
by the government with a maturity of
less than one year. T-bills are issued through a competitive bidding process at
a discount which means that rather than paying fixed interest payments like
conventional bonds. The bond provides the interest to the holder.
Initially, a limit of Tk 250 million was set for the
issue of such treasury bills. Later this limit was withdrawn and bangladesh bank was empowered to issue any amount of
treasury bills for the non-bank public. Despite the withdrawal of the limit,
the holdings of non-banking sectors remained small and commercial banks
comprised the main market for the treasury bills. These bills continued to be
reissued in every ninety days. In December 1994,. Up to August 1998, four
categories of treasury bills viz, 30-day, 90-day, 180-day and 1-year bills were
sold regularly through weekly auction basis. From 6 September 1998, these were
replaced by newly introduced 28-days, 91-days, 182-days, 364-days, 2-years and
5-years treasury bills.