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RBI Master Circular on Commercial Paper Guidelines (2009)

Current · Source: Reserve Bank of India · RBI/2009-10/45 · issued 01 Jul 2009 · ~2 min read
Quick answerRBI consolidated all existing CP guidelines into a single Master Circular effective July 1, 2009. Key rules: minimum net worth Rs 4 crore, minimum rating P-2, maturity 7 days to 1 year, minimum denomination Rs 5 lakh. No new policy changes were introduced.
The rule, in the simplest words
How it plays out — a real example

Rohit, a treasury manager at State Bank of India in Mumbai, checks a new CP issue from a corporate client. He first confirms the client’s net worth is over Rs 4 crore and that its rating is P-2 or better. Then he ensures the paper’s maturity is set for 30 days and that the issue size is at least Rs 5 lakh, all recorded in electronic form, before approving the bank’s investment.

What changed

This Master Circular consolidates all previous circulars on Commercial Paper (CP) guidelines into one document, effective July 1, 2009. It does not introduce new rules but updates and harmonizes existing instructions as of June 30, 2009.

What it means for you

Banks and lenders now have a single reference for CP issuance rules, reducing compliance confusion. The unchanged eligibility criteria (net worth Rs 4 crore, standard asset status, minimum P-2 rating) continue to govern CP market access. This consolidation simplifies audit and regulatory checks for all participants.

What you must do

Who it affects

Scheduled banks, Primary dealers, All-India financial institutions, Corporate borrowers issuing CP, Credit rating agencies

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the minimum credit rating required for CP issuance?

The minimum rating is P-2 from CRISIL or equivalent from ICRA, CARE, FITCH, or other RBI-specified agencies. The rating must be current at the time of issuance.

Can CP be issued for less than 7 days?

No, the minimum maturity is 7 days and the maximum is one year from the date of issue. The maturity cannot exceed the validity period of the credit rating.

What is the minimum investment amount for a single investor in CP?

The minimum investment is Rs 5 lakh (face value). CP can be issued in denominations of Rs 5 lakh or multiples thereof.

📜 Read the original circular — full text as issued by RBI
RBI/2009-10/45 Ref.No. FMD.MSRG.No.37/02.08.003/2009-10 July 1, 2009 Ashadha 09, 1931 (S) The Chairmen/Chief Executives of All Scheduled Banks, Primary Dealers and All-India Financial Institutions Dear Sir, Guidelines for Issue of Commercial Paper 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. Guidelines for issue of CP are presently governed by various directives issued by the Reserve Bank of India, as amended from time to time. A Master Circular incorporating all the existing guidelines/instructions/ directives on the subject has been prepared. It may be noted that this Master Circular consolidates and updates all the instructions/guidelines contained in the circulars listed in the Appendix, in so far as they relate to ‘guidelines for issue of CP’. This master circular has been placed on RBI website at www.mastercirculars.rbi.org.in Yours faithfully, (Chandan Sinha) Chief General Manager Master Circular on Guidelines for Issue of Commercial Paper (CP) as amended up to June 30, 2009 Introduction
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/45 · issued 01 Jul 2009. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💰 Credit
  • Verify that all corporate borrowers issuing CP meet the net worth, rating, and asset classification criteria before investing.
💻 IT / Systems
  • Train treasury and credit teams on the consolidated guidelines to avoid reliance on outdated circulars.
📜 Compliance
  • Update internal CP policy manuals to reference this Master Circular as the single source of guidelines.
  • Ensure CP investments are in dematerialised form and comply with minimum denomination (Rs 5 lakh) and maturity (7 days to 1 year) rules.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Scheduled banks, Primary dealers, All-India financial institutions, Corporate borrowers issuing CP, Credit rating agencies), your first concrete step on “RBI Master Circular on Commercial Paper Guidelines (2009)” is: “Update internal CP policy manuals to reference this Master Circular as the single source of guidelines.” (RBI issued this 01 Jul 2009).

  1. Circular: RBI/2009-10/45 -- RBI Master Circular on Commercial Paper Guidelines (2009)
  2. Issued: 01 Jul 2009
  3. Action required: Update internal CP policy manuals to reference this Master Circular as the single source of guidelines.
  4. Action required: Verify that all corporate borrowers issuing CP meet the net worth, rating, and asset classification criteria before investing.
  5. Action required: Ensure CP investments are in dematerialised form and comply with minimum denomination (Rs 5 lakh) and maturity (7 days to 1 year) rules.
  6. Action required: Train treasury and credit teams on the consolidated guidelines to avoid reliance on outdated circulars.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5128&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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