Cash Management Bill

Introduction

• Cash Management Bill (CMB) is a short-term financial instrument issued to meet the temporary cash flow of the government.
• The Government of India, in consultation with the Reserve Bank of India, issues CMBs. 
• In India, the first CMBs were issued in 2010 in order to supplement short-term cash-raising instruments such as treasury bills and ways and means advances.

Features of CMBs

• The maturity profile of CMBs is 91 days.
• The CMBs have the generic character of T-bills. Like T-bills, they are also issued at a discount and redeemed at face value at maturity.
• CMBs qualify as SLR securities. Under Section 24 of the Banking Regulation Act of 1949, investment in CMBs is also recognized as an eligible investment in government securities by banks for SLR purposes.
• The tenure, notified amount and date of issue of the CMBs depends upon the temporary cash requirement of the Government.