The Reserve Bank of India (RBI) has enabled an auto-bidding facility for investing in treasury bills (T-bills) via both the RBI retail direct website and the app. This auto-bidding facility requires a valid NACH (National Automated Clearing House) mandate for executing the T-Bills order.
With this additional facility, you can invest in T-bills by placing a conditional order that matches your requirements. It's similar to wanting to buy a stock at Rs 120 when the current market price is Rs 125. You would then put a conditional order saying that as soon as this stock’s price drops to Rs 120, you will go ahead and buy it.
The RBI said: “This facility complements the existing manual bidding option, and allows you to set investment preferences, viz., T-bill tenor, bid amount, bidding frequency and validity period, by creating Auto-bid Rules that are executed automatically once the bidding window of the respective T-bill auction becomes active on the RD portal/App.”
What are the key features of the auto-bidding facility?
The RBI said that you should start by adding a bank account and setting up a NACH mandate. This way, when your conditional order (auto-bidding) is activated, the funds can be withdrawn from your bank account to complete the order.
According to the RBI, key features of the facility are:
2. Calendar Rule: Select specific T-bill auction/s from the Quarterly Calendar for Auction of T-bills and specify the bid amount. The rule is to be set before the commencement of bidding of the respective auction on the RD portal/App.
Also read: Faster salary credit, SIP debit, EMI payment and more under new NACH 3.0 system by NPCI from July 2025, know more
What are treasury bills?
Treasury Bills (T-Bills) are money market instruments or short term debt instruments issued by the Government of India. At present, they are issued in three tenors -- 91 days, 182 days and 364 days. The Treasury Bills are zero coupon securities and pay no interest. Instead they are issued at a discount and redeemed at face value on maturity.
For example: a 91 day Treasury bill of Rs 100 (face value) may be issued at say Rs 98.2, that is, at a discount of Rs 1.9 and would be redeemed at the face value of Rs 100. The return to the investors is the difference between the maturity value or the face value (that is Rs 100) and the issue price).
What are the day count conventions used in calculating bond yields?
According to the RBI website, the day count convention is the method used to determine the holding period (in days) of a bond for calculating the accrued interest. Since using different day count conventions can lead to varying amounts of accrued interest, it is important for everyone in the market to follow a standard day count convention
.
For example, the conventions followed in the Indian market are as follows:
Bond market: The day count convention followed is 30/360, which means that irrespective of the actual number of days in a month, the number of days in a month is taken as 30 and the number of days in a year is taken as 360.
Money market: The day count convention followed is actual/365, which means that the actual number of days in a month is taken for number of days (numerator) whereas the number of days in a year is taken as 365 days. Hence, in the case of T-Bills, which are essentially money market instruments, money market convention is followed.
With this additional facility, you can invest in T-bills by placing a conditional order that matches your requirements. It's similar to wanting to buy a stock at Rs 120 when the current market price is Rs 125. You would then put a conditional order saying that as soon as this stock’s price drops to Rs 120, you will go ahead and buy it.
The RBI said: “This facility complements the existing manual bidding option, and allows you to set investment preferences, viz., T-bill tenor, bid amount, bidding frequency and validity period, by creating Auto-bid Rules that are executed automatically once the bidding window of the respective T-bill auction becomes active on the RD portal/App.”
What are the key features of the auto-bidding facility?
The RBI said that you should start by adding a bank account and setting up a NACH mandate. This way, when your conditional order (auto-bidding) is activated, the funds can be withdrawn from your bank account to complete the order.
According to the RBI, key features of the facility are:
- Auto-bidding is available only for T-bills and requires a valid NACH mandate.
- Types of Rules:
2. Calendar Rule: Select specific T-bill auction/s from the Quarterly Calendar for Auction of T-bills and specify the bid amount. The rule is to be set before the commencement of bidding of the respective auction on the RD portal/App.
- The rules can be amended, paused or cancelled anytime.
- Auto-bid is funded through NACH mandate linked to your registered bank account in the Retail Direct. Sufficient balance in the registered bank account is needed for funding the Auto-bid.
- Email and SMS alerts are sent for Auto-bid Rule creation, amendment, cancellation, expiry, bid placement, etc.
Also read: Faster salary credit, SIP debit, EMI payment and more under new NACH 3.0 system by NPCI from July 2025, know more
What are treasury bills?
Treasury Bills (T-Bills) are money market instruments or short term debt instruments issued by the Government of India. At present, they are issued in three tenors -- 91 days, 182 days and 364 days. The Treasury Bills are zero coupon securities and pay no interest. Instead they are issued at a discount and redeemed at face value on maturity.
For example: a 91 day Treasury bill of Rs 100 (face value) may be issued at say Rs 98.2, that is, at a discount of Rs 1.9 and would be redeemed at the face value of Rs 100. The return to the investors is the difference between the maturity value or the face value (that is Rs 100) and the issue price).
What are the day count conventions used in calculating bond yields?
According to the RBI website, the day count convention is the method used to determine the holding period (in days) of a bond for calculating the accrued interest. Since using different day count conventions can lead to varying amounts of accrued interest, it is important for everyone in the market to follow a standard day count convention
.
For example, the conventions followed in the Indian market are as follows:
Bond market: The day count convention followed is 30/360, which means that irrespective of the actual number of days in a month, the number of days in a month is taken as 30 and the number of days in a year is taken as 360.
Money market: The day count convention followed is actual/365, which means that the actual number of days in a month is taken for number of days (numerator) whereas the number of days in a year is taken as 365 days. Hence, in the case of T-Bills, which are essentially money market instruments, money market convention is followed.
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