Treasury bills are short-term debt instruments issued by the Bangladesh government with maturities of up to one year. They are sold at a discount to their face value at maturity, with the difference representing the interest earned. Treasury bills carry essentially no default risk since they are guaranteed by the government. Major banks and non-bank financial institutions in Bangladesh participate as primary dealers in the treasury bill auction process managed by the central bank.

1. Welcome to my
presentation
Treasury Bill
Md. Jubayed Hossain
ID:BBA110204201
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2. Treasury bill
Treasury bill or T-bill is a short-term debt issued by a national government with a
maximum maturity of one year. Treasury bills are sold at discount, such that the
difference between purchase price and the value at maturity is the amount of
interest. Treasury bills are fully guaranteed by the government and hence are
free from default risk. The biggest reason that T-Bills are so popular is because
they are one of the few money market instruments that are affordable to the
individual investors.
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3. Cont…
Investors invest in T-bills due to:
 To maintain the Statutory Liquidity Reserve (SLR)
 To maintain adequate liquidity
 To earn yields
 To utilize properly huge idle cash in banks
 To averse highly risky investments
Since they mature so quickly, T-bills are simply sold at a discount to their face value at
maturity. The discount is determined by the interest rate.
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4. The types of T-bills available in Bangladesh
30-day T-Bills
91-day T-Bills
182-day T-Bills
364day T-Bills
2-years T-Bills
5-years T-Bills
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5. Authorized Primary Dealers in Bangladesh:
The primary money market is comprised of Banks, FIs and primary dealers as
intermediaries and savings & lending instruments, treasury bills as instruments.
There are currently 15 primary dealers (12 banks and 3 FIs) in Bangladesh. The only
active secondary market is overnight call money market which is participated by
the scheduled banks and FIs. The money market in Bangladesh is regulated by
Bangladesh Bank (BB), the Central Bank of Bangladesh.
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6. Cont..
Banks-
 Sonali Bank - 9%
 Janata Bank - 9%
 Agrani Bank -9%
 Prime Bank -8%
 Uttara Bank -8%
 South-East Bank- 8%
 Jamuna Bank – 7%
 Natinal Credit and Commerce Bank – 8%
 Mercantile Bank -8%
 Mutual Trust Bank -7%
 AB Bank-8%
 National Bank -8%
Non Banks Financial Institutions : –
 International Leasing and Financial
Services Ltd - 1%
 LankaBangla Finance Limited - 1%
 Industrial Promotion and Development
Company 1%
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7. Cont..
Five newly-established commercial banks also got listed with the central bank as
primary dealers of the government securities. They are NRB Commercial Bank,
South Bangla Agriculture and Commerce Bank, Midland Bank, Farmers Bank and
Meghna Bank. But the information in Bangladesh Bank is yet to be updated.
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8. Auction Procedure
 Auction is held on every Sunday at 11 a.m. at the Motijheel Branch of BB. If
Sunday is a holiday, then the last working day before Sunday is used. All the
investors submit their bid unless otherwise pension or provident fund. After
receiving the bid, the auction committee decides how much T-bills will be
offloaded.
 The bidding papers including the rate are to be submitted before 9:00am to
10:30am and selection process of the bidders is closed in to 10:30 am.
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9. Auction Committee:
 Bangladesh Bank and ministry of finance decides what amount of T-bill are
issued for which period.
 Foreign Reserve & Treasury management division sends a letter to the Auction
Committee with the details criteria of Auction procedure.
 Committee involves 11 members among them 9 members are from the
Bangladesh bank and other 2 members are from ministry of finance and
planning.
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