What changed
This is a consolidation of existing CP guidelines into a single master circular. It updates and replaces all previous circulars listed in the appendix. No new requirements were introduced.
What it means for you
Banks and lenders now have a single reference document for CP issuance, reducing compliance complexity. The rules remain unchanged: only corporates with tangible net worth of Rs.4 crore, standard asset classification, and A2 rating from eligible CRAs can issue CP. Banks acting as IPAs must ensure strict adherence to these norms.
What you must do
- Update internal CP issuance and investment policies to reference this master circular.
- Verify borrower tangible net worth (min Rs.4 crore) and standard asset status before facilitating CP issuance.
- Ensure CP ratings are current, valid for the entire maturity period, and from specified CRAs (CRISIL, ICRA, CARE, FITCH, etc.).
- Ensure minimum investment of Rs.5 lakh per investor and denominations of Rs.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 rating is A2 as per SEBI's rating symbols, from specified CRAs (e.g., CRISIL, ICRA, CARE, FITCH). The rating must be current and valid for the CP's maturity.
Can a company with net worth below Rs.4 crore issue CP?
No. The issuer must have tangible net worth of at least Rs.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 one year from the date of issue.