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Master Circular on Commercial Paper Guidelines

Current · Source: Reserve Bank of India · RBI/2011-12/89 · issued 01 Jul 2011 · ~1 min read
Quick answerRBI consolidated all CP guidelines into a master circular. Eligible issuers include corporates with net worth ≥₹4 crore, PDs, and FIs. CP must have minimum P-2 rating, maturity 7 days to 1 year, and minimum denomination ₹5 lakh. Banks must ensure borrower accounts are standard assets.
The rule, in the simplest words
How it plays out — a real example

A gold‑loan officer in Indore checks that a corporate issuer’s net worth is ₹5 crore before approving a ₹10 lakh CP issuance, ensuring the CP has a P‑2 rating and a 90‑day maturity, and that the investor’s account is a standard asset. She then records the details in the bank’s CP policy log, confident that the new master circular covers all the rules.

What changed

This is a consolidation of existing CP guidelines into a single master circular, not new rules. It updates and replaces previous circulars listed in the appendix. Key unchanged requirements include eligibility, rating, maturity, and denomination norms.

What it means for you

Banks and lenders must refer to this master circular for all CP issuance and investment rules. The consolidation simplifies compliance but does not alter existing obligations. Banks financing CP issuers must verify the borrower's net worth, working capital limits, and asset classification.

What you must do

Who it affects

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

❓ Common questions

What is the minimum credit rating required for CP issuance?

The minimum rating is P-2 from CRISIL or equivalent from other RBI-specified agencies like ICRA, CARE, or FITCH.

Can a company with net worth below ₹4 crore issue CP?

No, the tangible net worth must be at least ₹4 crore as per the latest audited balance sheet.

What is the minimum maturity for CP?

CP can be issued for a minimum of 7 days and a maximum of up to one year from the date of issue.

📜 Read the original circular — full text as issued by RBI
RBI/2011-12/89 IDMD.PCD. 4 /14.01.02/2011-12 July 1, 2011 The Chairmen/Chief Executives of All Scheduled Banks, Primary Dealers and All-India Financial Institutions Dear Sir/Madam, Master Circular - Guidelines for Issue of Commercial Paper 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 enable highly rated corporate borrowers to diversify their sources of short-term borrowings and provide an additional instrument to the investors. 2. A Master Circular incorporating all the existing guidelines/instructions/ directives on the subject has been prepared for reference of the market participants and others concerned. 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, (K. K. Vohra) Chief General Manager Master Circular - Guidelines for Issue of Commercial Paper Table of Content
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/89 · issued 01 Jul 2011. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💰 Credit
  • Ensure corporate CP issuers meet net worth ≥₹4 crore and have standard asset classification.
📜 Compliance
  • Update internal CP policies to reference this master circular as the single source of guidelines.
  • Verify CP ratings are current and at least P-2 equivalent before investment or issuance.
  • Confirm CP maturity does not exceed the validity period of the credit rating.
  • Maintain minimum investment of ₹5 lakh per investor and denomination multiples of ₹5 lakh.
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 CP issuers, Credit rating agencies), your first concrete step on “Master Circular on Commercial Paper Guidelines” is: “Update internal CP policies to reference this master circular as the single source of guidelines.” (RBI issued this 01 Jul 2011).

  1. Circular: RBI/2011-12/89 -- Master Circular on Commercial Paper Guidelines
  2. Issued: 01 Jul 2011
  3. Action required: Update internal CP policies to reference this master circular as the single source of guidelines.
  4. Action required: Ensure corporate CP issuers meet net worth ≥₹4 crore and have standard asset classification.
  5. Action required: Verify CP ratings are current and at least P-2 equivalent before investment or issuance.
  6. Action required: Confirm CP maturity does not exceed the validity period of the credit rating.
  7. Action required: Maintain minimum investment of ₹5 lakh per investor and denomination multiples of ₹5 lakh.
  8. Owner: ____________ Target date: ____________
  9. Board/committee approval needed? Y / N
  10. 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=6558&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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