RBI: Guidelines for issue of Commercial Papers
- Eligible issuers of Commercial Papers: Corporates, Primary dealers & All India Financial institutions. A Corporate would be eligible only if:
- Tangible net worth > 4 crores;
- It has been sanctioned working capital limit by banks or FIs;
- & classification of borrowal a/c should be Standard Asset.
- Rating Requirement: All eligible participants shall obtain a minimum credit rating of 'A2' from the agencies as specified by the RBI.
- Maturity: Minimum of 7 days & maximum of up to 1 year.
- Denominations should be of Rs.5 lakhs or multiples. Single investment should not be less than 5 lakhs.
- Limits & amount of CP: Aggregate amount = (Limit approved by BOD or quantum indicated by CRA, whichever is lower)
- Investment in CP: Individuals, banking companies, other body corporate, NRIs & FIIs (should be within limit).
- Procedure of issuance:
- Every issuer must appoint an IPA for issuance of CP.
- The issuer should disclose to the potential investors its financial position
- After the deal confirmation, physical certificates will be issued to the investor or shall be credited to the investor's account with a depository.
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