What changed
RBI issued a master circular (IDMD.DOD. 14 /11.08.36/2010-11) that consolidates all previous directives on Commercial Paper into one document. This circular updates and replaces earlier circulars listed in the appendix, providing a single reference for CP issuance guidelines.
What it means for you
Banks and lenders now have a unified set of rules for CP issuance, reducing confusion from multiple circulars. The eligibility criteria, rating requirements, and maturity norms remain unchanged, but the consolidation simplifies compliance and reference for market participants.
What you must do
- Review the master circular to ensure your CP issuance processes align with the consolidated guidelines.
- Verify that corporate borrowers meet the tangible net worth (≥₹4 crore) and standard asset classification requirements before issuing CP.
- Confirm that CP ratings are current and from approved agencies (CRISIL, ICRA, CARE, FITCH Ratings India Pvt. Ltd. or other RBI-specified agencies) with minimum P-2 equivalent.
- Ensure CP maturities are between 7 days and 1 year, and denominations are ₹5 lakh or multiples thereof.
Who it affects
Scheduled banks, Primary dealers, All-India financial institutions, Corporate borrowers issuing CP
What is the minimum credit rating required for CP issuance?
The minimum credit rating is P-2 from CRISIL or an equivalent rating from ICRA, CARE, FITCH Ratings India Pvt. Ltd., or other RBI-specified agencies.
What is the maturity range for Commercial Paper?
CP can be issued for a minimum of 7 days and a maximum of up to one year from the date of issue, provided the maturity does not exceed the validity of the credit rating.
Who are eligible to issue CP under these guidelines?
Corporates with tangible net worth of at least ₹4 crore, sanctioned working capital limits, and a standard asset classification, as well as primary dealers and all-India financial institutions.