BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Corporates
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Primary dealers
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All India financial institutions
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All of above
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Detailed explanation-1: -Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note. It was introduced in India in 1990. Corporates, primary dealers (PDs) and the All-India Financial Institutions (FIs) are eligible to issue CP.
Detailed explanation-2: -Only a scheduled bank can act as an IPA for issuance of CP. 12. CP may be issued to and held by individuals, banking companies, other corporate bodies registered or incorporated in India and unincorporated bodies, Non-Resident Indians (NRIs) and Foreign Institutional Investors (FIIs).
Detailed explanation-3: -Corporates, primary dealers (PDs) and the All-India Financial Institutions (FIs) are eligible to issue commercial papers.
Detailed explanation-4: -Banks and all-India financial institutions are prohibited from underwriting or co-accepting issues of Commercial Paper. 16.
Detailed explanation-5: -Commercial paper is typically issued by companies to raise funds to meet their short-term financial obligations. This can include using the funds for working capital, refinancing debt, funding capital expenditures, and meeting other financial commitments.