Current · Source: Reserve Bank of India · RBI/2012-13/99 · issued 02 Jul 2012 · ~2 min read
Quick answerRBI consolidated all CP guidelines into a master circular. Key rules: minimum tangible net worth Rs.4 crore, minimum rating A2 from specified CRAs (e.g., CRISIL, ICRA, CARE, FITCH), maturity 7 days to 1 year, minimum denomination Rs.5 lakh (and minimum investment Rs.5 lakh per investor). Issuer's borrowal account must be a standard asset.
The rule, in the simplest words
Banks and lenders must follow a single master circular for Commercial Paper (CP) guidelines.
Only corporates with a tangible net worth of at least Rs.4 crore can issue CP.
CP must have a minimum rating of A2 from specified Credit Rating Agencies (CRAs) like CRISIL, ICRA, CARE, and FITCH.
CP maturity is between 7 days to 1 year.
Minimum denomination of CP is Rs.5 lakh and minimum investment per investor is also Rs.5 lakh.
How it plays out — a real example
Rahul, a deposits officer in Indore, is approached by a corporate borrower to issue Commercial Paper. Before proceeding, Rahul checks the borrower's tangible net worth, which is Rs.5 crore. Satisfied that the borrower meets the minimum requirement of Rs.4 crore, Rahul facilitates the CP issuance process. A deposits officer in Indore verifies the tangible net worth of a corporate borrower before facilitating CP issuance.
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.
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.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/99
IDMD.PCD. 04/14.01.02/2012-13
July 2, 2012
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
Encl.: As above
Table of Content
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/99 · issued 02 Jul 2012. The plain-English explanation above is BankPulse’s own independent summary.
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), your first concrete step on “Master Circular on Commercial Paper Guidelines” is: “Update internal CP issuance and investment policies to reference this master circular.” (RBI issued this 02 Jul 2012).
Circular: RBI/2012-13/99 -- Master Circular on Commercial Paper Guidelines
Issued: 02 Jul 2012
Action required: Update internal CP issuance and investment policies to reference this master circular.
Action required: Verify borrower tangible net worth (min Rs.4 crore) and standard asset status before facilitating CP issuance.
Action required: Ensure CP ratings are current, valid for the entire maturity period, and from specified CRAs (CRISIL, ICRA, CARE, FITCH, etc.).
Action required: Ensure minimum investment of Rs.5 lakh per investor and denominations of Rs.5 lakh or multiples thereof.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
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.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=7412&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.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.