Malé: In a move to support Maldives amid its ongoing financial crisis, the State Bank of India (SBI) has subscribed to $50 million worth of treasury bills (T-bills) issued by the Maldivian Ministry of Finance. This subscription, made at the special request of the Maldivian government, is set for a one-year term, starting from September 19, 2024. SBI had previously extended similar assistance in May 2024.
Treasury bills are short-term debt instruments issued by the government to meet immediate financial needs. The Maldivian government sought this emergency financial aid to stabilize its economy. The two consecutive subscriptions by SBI are seen as crucial steps in helping Maldives manage its economic challenges.
SBI’s financial assistance will provide much-needed relief to Maldives, reinforcing the financial cooperation between the two nations. This support not only helps stabilize the Maldivian economy but also strengthens bilateral relations and promotes regional economic stability.
What Does It Mean to Subscribe to Treasury Bills?
Subscribing to treasury bills means an investor, such as a bank, financial institution, or individual, buys government-issued debt instruments. Essentially, the investor is lending money to the government for a short period. When SBI subscribes to the treasury bills, it is lending money to the Maldivian government, which will repay the amount with interest after the term ends.
In simple terms, subscribing to treasury bills means purchasing them and lending money to the government, which is repaid with interest after the specified period.