The government must raise funds to finance its spending programme. Apart from its income from tax and non-tax revenue sources, the Government borrows a significant amount from the market through issue of securities called Government securities in order to bridge the shortfall in revenue.  

These Government Securities are tradable instruments and are issued by the Reserve Bank of India, on behalf of Government of India, under Central Government's market borrowing programme. Such securities are auctioned in the primary market for players like commercial banks, primary dealers, state and central governments, financial institutions, insurance companies and individuals. The securities are then traded in the secondary market by the market participants.

While the Central Government issues both: treasury bills(T-bills) which are short term with maturities of less than one year, and Government bonds or dated securities(CGs) which are long term securities with maturities of one year or more, the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs). Since the G-Secs carry sovereign guarantee, the risk of default is, practically, zero.

PNB Gilts Ltd. has played a pivotal role in strengthening the domestic fixed income markets. As a primary dealer, PNB Gilts Ltd. invests and trades primarily in Government securities. The company’s primary activities entail supporting the government borrowing programme via underwriting of Government securities issuances, participating in the auction of G-secs and actively trading in a gamut of fixed income instruments such as CGs, T-Bills, SDLs, Corporate Bonds, Interest Rate Swaps and various money market instruments such as Certificates of Deposits, Commercial Papers, etc. thus contributing to a deep and broad-based market. The PD model is such that besides our own net-worth, borrowing from the money market forms the most important part of our daily function. We, as standalone PDs, are only akin to banks when it comes to participation in all money market instruments. We borrow from the call money market, repo markets, TREPS, and we also have a standing liquidity facility(refinance) from RBI. We are also active players in the equity, interest rate derivatives and currency derivative segments. The company has a dedicated trading desk managed by experienced professionals having strong research and market insights and is a dominant player marking its presence with significantly high market share in the overall trading turnover.