Goseeko blog

What is G-sec?

by Uddipana Gogoi

G-sec refers to government security. The Central Government or the State Governments issues. These are tradable for a short period and long period. However, is an instrument of indebtedness (a bond) issued by a national government to support government spending. The short term government security is treasury bills and long term government security is government bonds. In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities or State Development Loans (SDLs). 

Features of G-sec

Some of the significant features of government securities are –

  1. G-sec is a risk free security.
  2. Secondly, it issues for a variety of periods ranging from 90 days to 40 years.
  3. Than, it is traded in the secondary market.
  4. Reserve Bank of India issues such securities.


Some of the advantages of are –

  1. Firstly, G-sec is a risk free security and investors make investments to get certainty of return.
  2. Secondly, it provides investment avenues both for short and long periods. 
  3. Than, G-sec provides a diversified portfolio for investment.
  4. Lastly, it provides liquidity to investment as it issues for a short period.

Types of G-sec securities

The classification of government securities are –

  1. Treasury bills (TBs): Treasury bills are money market instruments. It covers periods like 90 day, 182 day and 365 day. RBI issues treasury bills to maintain short term liquidity of the economy. 
  1. Cash management bills (CMBs): In 2010, Government of India, in consultation with RBI introduced CMBs. It is  a short-term instrument. It helps to meet the temporary mismatches in the cash flow of the Government of India. The CMBs have the generic character of T-bills.
  2. Dated G-sec: Dated G-Secs are securities that carry a fixed or floating coupon (interest rate). It is paid on the face value, on a half-yearly basis. Generally, the tenor of dated securities ranges from 5 years to 40 years.

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