Main Note - [G-Secs-Primary Market](G-Secs-Primary%20Market.md) 1. [Aug 10, 2009](RBI_Press%20Release_20090810_Issuance%20of%20Government%20of%20India%20Cash%20Management%20Bills.pdf) - The GoI in consultation with RBI, announced this new short-term instrument to meet the ==temporary mismatches in the cash flow== of the Government of India. ^a5a69b 2. In May 2010, the first [auction](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=21168) was conducted. The non-competitive bidding scheme is not available for CMBs. 3. CMBs have the generic character of T-bills but are issued for maturities less than 91 days. 4. Both cash management bills and treasury bills are basically meant for short-term capital mismatches. 5. During second half of 2013 (July/August/September 2013), the Reserve Bank of India used cash management bills (CMBs) as a measure to contain the volatility in the foreign exchange market. The issuances were aimed at draining out liquidity in the short-end of the market spectrum. These measures helped in keeping the money market conditions tight, with money market rates rising to around the MSF rate (that is 300 bps higher than the repo rate) 6. ==They can also used as a liquidity management tool (but not under OMOs in dated G-Secs to adjust liquidity on durable basis) but to adjust the rupee liquidity conditions in the market but not on durable basis but rather transient/frictional basis.== 1. In [2016](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=38769), they were issued under the [[Market Stabilisation Scheme (MSS), 2004|MSS]] scheme. 2. In [2013](RBI_Press%20Release_20130808_RBI’s%20further%20measures%20to%20address%20volatility%20in%20Forex%20Market-%20To%20auction%20`%2022,000%20crore%20GoI%20Cash%20Management%20Bills%20Every%20Monday.pdf), they were issued to absorb liquidity amid volatility in the forex market. 7. As long as there is scope of borrowing under the [[Ways and Means (WMA)|Ways and Means Advances (WMA)]], resort to Cash Management Bills (CMBs) is usually not being undertaken by the government 8. Treasury bills have structured tenors, while CMBs are very short notice for issue. 9. They are permitted [SLR (Statutory Liquidity Ratio)](SLR%20-%20Statutory%20Liquidity%20Ratio.md) securities. ## Related Notes 1. [G-Secs-Primary Market](G-Secs-Primary%20Market.md) 2. [G-Secs-Secondary Market](G-Secs-Secondary%20Market.md)