Dated securities
Also called: Government bonds · Topic: Financial Markets, Instruments, Insurance and Pensions · NCERT: Beyond NCERT
Meaning
Dated securities are long-term government securities (G-secs), also called government bonds. Their coupon (interest) can be fixed or floating and is usually paid every half-year. Maturities run from about 2 to 50 years. They carry practically no default risk. RBI issues them through auctions on behalf of the government as its debt manager. Banks hold them to meet the Statutory Liquidity Ratio (SLR), which makes banks steady buyers.
Example
India issued its first 50-year government bond in 2022. The 10-year G-sec is India's benchmark bond, and its yield is watched as a guide to long-term interest rates. States borrow through similar dated securities called State Development Loans (SDLs).
Don't confuse with
- Treasury bills: T-bills are short-term G-secs of 91, 182 and 364 days. They pay no coupon and are issued at a discount. Dated securities are long-term and pay regular coupons.
Related concepts
- Government securities
- State Development Loans
- Primary dealer
- Inflation-indexed bond
- Oil bonds
- Sovereign Gold Bond
- Fully Accessible Route
- Global bond index inclusion