CURRENT AFFAIRS

Detailed explanation-1: -Guidelines for issue of CP are presently governed by various directives issued by the Reserve Bank of India, as amended from time to time. Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note.

Detailed explanation-2: -The main issuers of commercial paper are finance companies and banks, but also include corporations with strong credit, and even foreign corporations and sovereign issuers. The main buyers of commercial paper are mutual funds, banks, insurance companies, and pension funds.

Detailed explanation-3: -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-4: -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).