Cash Management Bill
Cash Management Bill (CMB): The Government of India, in consultation with the RBI, decided to issue a new the short-term instrument, known as Cash Management Bills, since August 2009 to meet the temporary cash flow mismatches of the government. The Cash Management Bills are non-standard and discounted instruments issued for maturities less than 91 days.
The CMBs have the generic character of Treasury Bills (issued at discount to the face value); are tradable and qualify for ready forward facility; investment in it is considered as an eligible investment in government securities by banks for SLR.
It should be noted here that the existing Treasury Bills serve the same purpose, but as they were put under the WMAs (Ways & Means Advances) provisions by the Government of India in 1997, they did not remain a discretionary route for the government in meeting its short-term requirements of funds at will (see ‘Fiscal Consolidation in India’, sub-topic in Chapter 18 Public Finance for details). CBM does not come under similar WMAs provisions.
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