Treasury
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• A Repurchase Agreement is where a holder of securities sells those securities to an investor with an agreement to repurchase them at a fixed price on a designated future date. The security "seller" in effect borrows money from the security "buyer" for the period of the agreement, and the terms of the agreement are structured to compensate the "lender" for this.

• A Reverse Purchase Agreement is where an investor buys securities from a security holder, with an agreement to sell them at a fixed price on a designated future date

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 GS’s are

• Repayment guaranteed by the Government
• Invested funds are 100 % secured
• Attractive returns
• Highly liquid – can be bought & sold anytime
• Ownership can be transferred easily
• Highly recognized security in the market
• Can be used as a collateral

Eligible Investors:

• 1. Sri Lankan Citizens
• 2. Foreign Investors
• Foreign institutional investors including country funds, regional funds or mutual funds.
• Corporate bodies incorporated outside Sri Lanka
• Citizens of foreign states whether resident in Sri Lanka or outside Sri Lanka
• Non-resident Sri Lankan

Foreign exchange brought into the country for the purchase of treasury bills and treasury bonds, proceeds realized on a sale/maturity of treasury bills and treasury bonds, and coupon payments or any income realized by way of capital gain shall be routed through a rupee "Inward Investment Account" (IIA) opened or already maintained with the bank in the name of an eligible investor.

Treasury Bills

A short term Government Security issued by The Central Bank of Sri Lanka on behalf of the Government.

• The Bank issues Treasury Bills 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, Treasury Bills are credit risk-free, since the issuer is the sovereign. They are available in 3, 6 or 12 months.

Some of the features of T-Bills are

• Credit risk-free
• No Debit Tax
• Short term investments
• Can be pledged as collateral for loans
• Can be withdrawn in part, if required

Treasury Bonds

Treasury Bonds are medium to long term Government Securities, issued by The Central Bank of Sri Lanka on behalf of the Government. As with any Government Security, Treasury Bonds are risk-free credit investments, since the issuer is the sovereign.

• Treasury Bonds are available from 2 to 30 years
• Treasury Bonds carry two interest rates
• Coupon Rate: Rate at which semi-annual (every six months) coupons (interest payments) are paid.
• Yield to Maturity (YTM): Overall effective return to 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 Debit Tax
• Semiannual coupons provide a stream of interest payments during the investment period
• Can be pledged as collateral for loans
• Can be withdrawn in part, if required

According to the CBSL rules and regulations the following documents are required before entering in to a Government Security transaction.

For Corporates / Institutions

• Duly filled application form
• Treasury Bills -  click here  to download
• Treasury Bonds -  click here  to download
• Application for Central Depository System - customer notification form*
click here to download
• Customer Agreement for Government Securities - Two copies of the customer agreement is provided by the bank where the customer needs to duly sign and return one copy to the bank.*
click here to download
• Application for Lanka secure e-statements facility by corporate customers
click here to download
• Board Resolution including an approval to invest in Government securities with People’s Bank
• Certificate of Incorporation
• Customer Agreement for Government Securities - Two copies of the customer agreement should be completed and duly signed.*
• Authorized signatories (can be included in Board resolution or can be a letter issued by authorized person of the Company)

For Individual Investors

• Duly filled application form
• Treasury Bills - click here  to download
• Treasury Bonds - click here  to download
• Application for Central Depository System - customer notification form*   click here  to download
• Customer Agreement for Government Securities - Two copies of the customer agreement is provided by the bank where the customer needs to duly sign and return one copy to the bank.*
  
click here to download
• Application for Lanka secure e-statements facility by corporate customers
click here to download

* These documents are available in People’s bank Head Office and will be sent to branches on the request of a customer or can be downloaded from the website. . Once the documentation is completed customer should handover the documents to a People’s bank branch.

• Once the documentation is completed customer can invest in Government securities. Please find below the guidelines for investing in GS with people’s bank;
• Minimum amount (Face value)
  Treasury Bill LKR 100,000.00
  Treasury Bond LKR 1,000,000.00
• Transactions are done via Current A/C or Savings A/C
• Government securities are subject to availability of stocks
• Funds should be available on the day of transaction
• Application should reach Treasury Department (People’s Bank) before 3.00 pm
• You can send the application to Treasury Front Office via fax or email. (Fax no 0112458842) or through any People’s bank branch

For rates, please contact
pdu@peoplesbank.lk at Treasury.