These are securities issued by the Central Bank of Sri Lanka, on behalf of the Government of Sri Lanka. Since the issuer is the sovereign, these are de facto credit risk free investments, which is certainly a relief to investors.

Some of the features of GSs are;

• Repayment guaranteed by the Government
• Invested funds are 100 % secured
• Attractive returns
• Highly liquid – can be bought & sold any time
• Ownership can be easily transferred
• Highly recognized security in the market
• Can be used as a collateral
• Free of withholding tax & stamp duty

Government Securities can be categorized as follows;

1. Treasury Bills
2. Treasury Bonds
3. Central Bank Securities

A short term Government Security, issued by CBSL on behalf of the GOSL.

T Bills are issued at a discount to face value.
The difference between the cost & maturity value (face value) will be the interest income of the investor.
As with any Government Security, T Bills are credit risk free, since the issuer is the sovereign. T Bills are available in 3, 6 or 12 months.

Some of the features of T Bills are;

• Credit risk free
• No Withholding Tax (WHT) on interest
• No Debit Tax
• Short term investments
• Can be pledged as collateral for loans
• Can be withdraw in part, if required

A medium to long term Government Security, issued by CBSL on behalf of the GOSL. As with any Government Security, T Bonds are credit risk free investments, since the issuer is the sovereign.

T Bonds are available from 2 to 5 Years.
T Bonds carry two interest rates;

• Coupon Rate: Rate at which semi annual (every 6 months) coupons (interest payments) are paid.
• Yield to Maturity (YTM): Overall effective return to be earned by investing in the bond and holding it up to the maturity date.

Some of the features of T Bonds are;

• Credit risk free
• No Withholding Tax (WHT) on interest
• No Debit Tax
• Semi annual coupons provide a stream if interest payments during the investment period
• Can be pledged as collateral for loans
• Can be withdraw in part, if required

A short term security issued by CBSL, mainly as a tool in its Open Market Operations to absorb excess liquidity in the interbank money market

A special scheme launched by CBSL in 2009, to promote T Bills & Bonds among Sri Lankan Diaspora & Migrant Workforce. In addition to attractive features of T Bills & Bonds, this scheme provides;

• Attractive interest rates
• Ability to repatriate investment proceeds (including interest) without any exchange control restrictions.
• Free from tax and stamp duty
• Highly liquid investments, which can be tradable in the secondary market.
• Ability to book Forward Exchange Contracts to mitigate currency risk.

If you wish to invest under this scheme, you have to open a Securities Investment Account (SIA) & relevant details can be found here.