BANKING AFFAIRS

Detailed explanation-1: -As you are aware, Commercial Paper (CP), an unsecured money market instrument issued in the form of a promissory note, was introduced in India in 1990 with a view to enabling highly rated corporate borrowers to diversify their sources of short-term borrowings and to provide an additional instrument to investors.

Detailed explanation-2: -Accordingly, introduction of Commercial Paper (CP) as a money market instrument was announced in the Governor’s statement on Monetary and Credit Policy in March 1989. It was, however, formally introduced in the market on January 1, 1990.

Detailed explanation-3: -Commercial paper, also called CP, is a short-term debt instrument issued by companies to raise funds generally for a time period up to one year. It is an unsecured money market instrument issued in the form of a promissory note and was introduced in India for the first time in 1990.

Detailed explanation-4: -On 27th March 1989, commercial paper in India was introduced by RBI in the Indian money market. It was initially recommended by Vaghul working Group on the basis of the following points. The registration of commercial papers should only be granted to companies having Rs.

Detailed explanation-5: -A commercial paper can be issued for maturities between a minimum of 7 days and a maximum of up to one year from the date of issue.