RBI in addition to being the banker to all banks, is also the banker to the Government of India. So, when the Government of India requires money, they borrow it from Reserve Bank of India.

So, in order to lend money to the Government of India, RBI in turn borrows it from commercial banks, primary dealers, insurance companies, etc. In lieu of the money borrowed, the RBI issues government securities or GILTs to them with a specific tenure.

As they are issued by the government they are considered extremely safe with no risk of default. Depending on the tenure, they are categorized into short-term or long-term securities.