What is a Treasury Bill?
Treasury bill is a short term debt instrument (3-12 months) issued by the Government of Sri Lanka.
What are the Main Features of Treasury Bills?
• Risk free, gilt edged debt instrument
• Short term debt instrument (3-12 months)
• The principal plus interest will be paid back on maturity
• Yield rates are determined by the market
• Tradable instrument in the secondary market
• Issued in scripless form
What Benefits can be derived by Investing in Treasury Bills ?
- It is an absolutely risk free investment, since it is issued by the sovereign government. Hence, they are called gilt-edged securities meaning that they are covered by gold.
- You can get the highest rate of interest since the yield rates are determined by the market.
- Since these bills are tradable in the secondary market, you can obtain instant liquidity by selling them in the market.
- All receipts of interest and maturity proceeds are fully repatriable.
- You could also have a joint investment with some other eligible person or persons. Hence, it is a very good way to share your investments with loved ones.
- You are not subject to further taxation, since a withholding tax of 10 percent is already charged at source.
- No stamp duty is payable on these bills.
- Transactions relating to your investment will be done through a state of the art, Scripless Security Settlement System and the fully automated Central Depository System (CDS).
Who can invest in Treasury Bills?
a. Foreign country funds, mutual funds or regional funds
b. Corporate bodies incorporated outside Sri Lanka;
c. Citizens of foreign states.
What Types of Treasury Bills Foreign Investors Can Purchase?
Eligible foreign investors can purchase, sell or discount Treasury bills with a maximum maturity period of 12 months.
How Can I Purchase Treasury Bills?
You can purchase Treasury bills at any time through Commercial Bank by opening a special LKR account named TIERA-2 (Treasury Bill Investment External Rupee Account 2)
What is the Minimum Investment Amount ? (for Non Resident Sri Lankans, Foreign Nationals, Corporate Bodies and Institutional Investors)
individuals - USD 250,000/- (or equivalent)
corporates - USD 1,000,000/- (or equivalent)
How Can I Collect Interest and Maturity Proceeds?
Maturity proceeds and Interest on Treasury bills are credited on due dates directly to your TIERA-2 account.
How do I Get Information on Treasury Bills?
For any clarifications, please contact:
Mr Sanath Wijesuriya, Mr Hemal Jayasekara, or Mr Suresh Pinto at the Fixed Income Securities desk, Global Markets, Commercial Bank of Ceylon PLC.
Telephone - 94-11-2332319, 94-11-2421831
Email - treasury@combank.net
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