Government securities (G-secs) are sovereign securities which are issued by the Reserve Bank of India on behalf of Government of India, in lieu of the Central Government's market borrowing programme.

G-Secs are of the following categories:

• Central Government Securities
• State Government Securities
• Treasury Bills

The Central Government borrows funds to finance its 'fiscal deficit'. The market borrowing of the Central Government is raised through the issue of dated securities and 364 days treasury bills either by auction or by floatation of loans. The principal and interests therein of these securities are fully and unconditionally guaranteed by the Central Government or any State Government.

In addition to the above, treasury bills of 91 days are issued for managing the temporary cash mismatches of the Government. These do not form part of the borrowing programme of the Central Government.


TRADING IN GOVERNMENT SECURITIES:

Buy:

• Open a demat account with any Depository Participant of NSDL/CDSL in case you already do not have a demat account.
• Contact Paterson Government Securities Desk at gsec@paterson.co.in.
• Obtain rates for purchase of government security.
• Decide the government security to be purchased from the rates given as above.
• Amount for purchase of government security is payable by cheque/DD.
• Submit cheque/DD at the marketing office, Nungambakkam branch.
• We will ensure credit of the security to the investor’s demat account.

Sell:

• Contact Paterson Government Securities Desk at gsec@paterson.co.in.
• Obtain rates for sale of government security.
• Give instructions for debit of your demat account to your Depository Participant.
• We will remit the money payable by cheque/Demand Draft directly to your registered contact address.

Hold:

• Government securities can be held in demat form, in the same manner as shares are held in a demat account.
• To be able to purchase a government security you must have a demat account with any depository participant of NSDL/CDSL.
• If you already has a demat account with any NSDL depository participant for shares, the same account can be used for holding government securities as well.

BENEFITS OF INVESTING IN GOVERNMENT SECURITIES:

• No tax deducted at source
• Zero Default Risk, being a sovereign paper
• Greater safety and lower volatility
• Ease in ownership transfer, transparency in transactions and settlement procedures through CDSL
• High liquidity
• Guaranteed rate of return (coupon rate)
• Tax exemption for interest earned on G-Secs up to Rs. 3,000/- over and above the limit of Rs.12,000/- under Section 80L (as amended in the latest Budget).

CONTACT US
To find more about our how to invest in Government Securities, kindly contact us at gsec@paterson.co.in or call us at (044) 42196563.