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CPSEs to invest temporary cash surplus in T-bills, debt MFs

CPSEs have around Rs. 2 trillion cash surplus. However, no official information has been provided on how much of this is temporary cash surplus

April 30, 2013 4:18 IST | India Infoline News Service
Government-appointed committee has suggested that central public sector enterprises (CPSEs) may be allowed to invest their ‘temporary’ cash surplus in Treasury bills and private sector debt mutual funds, according to a media report.

‘Temporary’ cash surplus means funds available for a day to a year.

CPSEs have around Rs. 2 trillion cash surplus. However, no official information has been provided on how much of this is temporary cash surplus, the report added.

The Committee has also suggested that CPSEs be allowed to invest in Treasury bills and collateralised borrowing and lending obligation (CBLO).

CPSEs may also be allowed to invite competitive bids to park such funds with banks. These moves will help CPSEs earn more on their surplus funds which, in turn, will help their profitability.

The Government-appointed committee has submitted its report the Cabinet, who would consider the recommendations mentioned, the report said further.

A Treasury bill is a short-dated government security, yielding no interest but issued at a discount on its redemption price. An investor gets returns on the basis of the difference in face value and discounted value of bonds.

CBLO helps an entity to lend money for one day or up to 90 days. It can also be extended up to one year.



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