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Government Securities (G-Secs)
Government securities are bonds and bills issued by the central or state governments to borrow money. Long-term ones are called dated securities or G-secs; short-term ones are treasury bills. The RBI auctions them on the government’s behalf, mostly to banks, insurers and pension funds.
Why It Matters
Because the government is the safest borrower, the interest it pays sets the floor for every other loan in India.
In India
Every week the RBI auctions several thousand crore rupees of government bonds. Much of the money comes from household savings held by banks, LIC and the EPFO.