Treasury Bonds

Treasury bond is a medium and long term debt instrument issued by the Government of Sri Lanka under the Registered Stock and Securities Ordinance No. 7 of 1937 (as amended) when it raises domestic public debt for budgetary purposes.

As an Agent of the Government of Sri Lanka, the Public Debt Department of the Central Bank of Sri Lanka (CBSL) issues the Treasury bonds, pays interest on due dates and repays the principal on maturity. In terms of annual borrowing targets specified in the Appropriation Act which is approved by the Parliament annually, the Government of Sri Lanka is authorized to issue Treasury bonds.

These are medium and long-term government securities and are issued in maturities ranging from 2 years to 30 years. Treasury bonds are issued by the Public Debt Department of the Central Bank, on behalf of the Government of Sri Lanka, under the provisions of the Registered Stocks and Securities Ordinance. Treasury bonds are interest-bearing securities, with interest paid bi-annually. Treasury bills and bonds are guaranteed by the Government and are the safest of all investments, as they are free of default risk. Treasury bills and bonds are tradable securities which are sold by auction to Primary Dealers, who in turn market the securities to the public. The yields on Treasury bills and bonds are market determined and the market is both active and liquid. From 2004, Treasury bills and bonds are issued in scrip-less (paperless) form and transactions are recorded electronically in the "LankaSecure" system of the Central Bank.

Risk free, gilt edged debt instrument Maturities are available with 2-20 years It carries half yearly coupon payments and the principal is repaid on maturity Yield rates are determined by the market Tradable instrument in the secondary market Issued in script less form Interest earnings are exempted from withholding Tax Readily en-cashable. Accepted as collateral by all lending associations.

NSB Fund Management Co Ltd No 400, Galle Road, Colombo 03. Sri Lanka. Tel: +94 11 2425010; +94 11 2425012; +94 11 2565956 Fax: +94 11 2574387 Email: [email protected] SWIFT: NSBFLKLX Or your nearest NSB Branch or for more information call us on our 24 hour hotline at +94 11 2 379 379. NSB offers an unmatched security for the deposits of our customers, being 100% guaranteed by the Government of Sri Lanka.

• It is an absolutely risk free investment, since it is issued by the sovereign government. Hence, they are called gilt-edged securities meaning that they are covered by gold.


• It is possible to get the highest rate of interest since the yield rates are determined in the market.


• Since these bonds are tradable in the secondary market, it is possible to obtain instant liquidity by selling them in the market.


• All receipts of interest and maturity proceeds are fully reparable.


• It is possible to have a joint investment with some other person or persons.


• Not subject to further taxation, since a withholding tax of 10 percent is charged at source.


• No stamp duty is payable on these bonds.


• The CBSL which maintains these investments in state of the art Scrip less Security Settlement .

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