Treasury Bills Explained: How RBI's 91, 182 and 364-Day T-Bill Auctions Work
Treasury Bills, or T-Bills, are among the simplest government securities in India, yet the auction results RBI publishes every week can look confusing at first: a cut-off price, a YTM, a weighted average yield, competitive and non-competitive bids. This explainer walks through each term using one real example, the T-Bill auction RBI held on 28 October 2026.
What is a Treasury Bill?
In its primer on the government securities market, RBI describes T-Bills as short-term debt instruments issued by the Government of India, currently in three tenors: 91 days, 182 days and 364 days. They are zero coupon securities, which means they pay no interest. Instead, they are issued at a discount and repaid at face value on maturity. The investor's return is the difference between the face value and the issue price.
The same primer says government securities carry practically no risk of default. That is about credit risk only. Prices of government securities can still move before maturity.
The 28 October 2026 auction at a glance
RBI announced this auction in Press Release 2026-2027/1379 and published the results in Press Releases 2026-2027/1398 and 2026-2027/1399.
Tenor | Notified (₹ crore) | Cut-off price (₹) |
|---|---|---|
91-day | 8,000 | 98.5422 |
182-day | 8,000 | 96.8376 |
364-day | 7,000 | 93.7456 |
Tenor | Cut-off yield | Weighted avg yield |
|---|---|---|
91-day | 5.9337% | 5.9094% |
182-day | 6.5493% | 6.5140% |
364-day | 6.6900% | 6.6391% |
The total notified amount was ₹23,000 crore, and RBI accepted the full notified amount in each tenor. Settlement was on 29 October 2026.
How to read the cut-off price
Prices are quoted for ₹100 of face value. Take the 91-day bill: a cut-off price of ₹98.5422 means a buyer at that price pays ₹98.5422 today and receives ₹100 at maturity. The gain is ₹1.4578.
To turn that into an annual yield, divide the gain by the price and scale it to a year:
(100 − 98.5422) ÷ 98.5422 × 365 ÷ 91 ≈ 5.93%
That matches the 5.9337% YTM in RBI's result (our calculation). The same method on the 182-day bill, with 182 days in place of 91, gives about 6.55%, in line with RBI's 6.5493%.
A lower price means a higher yield. That is why the cut-off price is the lowest price RBI accepted and the cut-off yield is the highest yield it accepted.
Cut-off yield vs weighted average yield
The auction uses the multiple price method, so each successful competitive bidder pays the price they quoted. The cut-off is the last accepted price. The weighted average price, and the yield that goes with it, averages all successful bids by amount. In this auction, the 91-day weighted average yield was 5.9094%, a little below the 5.9337% cut-off yield.
The weighted average yield is also used elsewhere. For example, the coupon on the Government of India Floating Rate Bond 2034 is linked to the weighted average yield of 182-day T-Bill auctions, as explained in our post on how the FRB 2034 coupon resets.
Competitive and non-competitive bids
Tenor | Competitive bids received | Bids accepted |
|---|---|---|
91-day | 95 | 58 |
182-day | 77 | 48 |
364-day | 111 | 68 |
Competitive bids are where bidders quote a price. Competitive bids worth ₹15,676.74 crore, ₹21,225.17 crore and ₹15,310 crore came in for the 91-day, 182-day and 364-day bills. In the 182-day bill, that was against ₹8,000 crore notified.
Non-competitive bidders do not quote a price. RBI's auction notice says State Governments, eligible provident funds, designated foreign central banks and some others can bid this way, with their allocation outside the notified amount. Individuals can also bid non-competitively as retail investors, capped at 5% of the notified amount, including through the RBI Retail Direct portal. In this auction, non-competitive bids accepted came to ₹25,741.40 crore in the 91-day bill, ₹2,990 crore in the 182-day bill and ₹2,350 crore in the 364-day bill.
Things to keep in mind
One auction is a snapshot. Yields change from week to week, so check the latest RBI release.
The yield worked out above is a simple annualised figure for the full holding period, before tax.
T-Bills are a different product from corporate bonds and debentures. For how credit risk is shown on those, see our explainer on SEBI's Credit Risk-o-Meter.
FAQ
What is a Treasury Bill in India?
It is a short-term debt instrument of the Government of India, issued in 91-day, 182-day and 364-day tenors. It pays no interest; it is issued at a discount and repaid at face value on maturity.
What does the cut-off price in a T-Bill auction mean?
It is the lowest price RBI accepted for ₹100 of face value. In the 28 October 2026 auction, the 91-day cut-off price was ₹98.5422, with a YTM of 5.9337%.
Can an individual invest in T-Bills through the auction?
Yes. RBI's auction notice allows individuals to bid on a non-competitive basis as retail investors, capped at 5% of the notified amount, including through the RBI Retail Direct portal.
What is the difference between cut-off yield and weighted average yield?
The cut-off yield is the highest yield RBI accepted. The weighted average yield averages all successful competitive bids by amount, so it is usually slightly lower.
Sources
About the author: Nishi Jain is a full-time trader in Jaipur and ex-JioBlackRock.
Disclaimer: Education-only explainer. Not investment advice. No bond or security recommendation is made here. Please read RBI's official releases and consult a SEBI-registered adviser before investing.
