Gilt funds, as they are conveniently called, are mutual fund schemes floated by asset management companies with exclusive investments in government securities. The schemes are also referred to as mutual funds dedicated exclusively to investments in government securities. Government securities mean and include central government dated securities, state government securities and treasury bills. The gilt funds provide to the investors the safety of investments made in government securities and better returns than direct investments in these securities through investing in a variety of government securities yielding varying rate of returns gilt funds, however, do run the risk.. The first gilt fund in India was set up in December 1998.
Facilities from Reserve Bank of India
The Reserve Bank provides liquidity support and other facilities, such as, SGL and current accounts, transfer of funds through the Reserve Bank's Remittance Facility Scheme and access to call money market to dedicat