Examples Of Commercial Paper In India
Commercial paper is issued by a wide variety of domestic and foreign firms including financial companies banks and industrial firms.
Examples of commercial paper in india. Commercial paper or cp is a short term debt instrument issued by companies to raise funds generally for a time period up to one year. Major investors in commercial paper include money market mutual funds and commercial bank trust departments. It is an unsecured money market instrument issued in the form of a promissory note and was introduced in india in 1990.
Find out the rate of interest on this commercial paper. It was initially recommended by vaghul working group on the basis of the following points. 5 cores and above net worth with excellent dividend payment record.
The registration of commercial papers should only be granted to companies having rs. Commercial paper in india is a new addition to short term instruments in indian money market since 1990 onward. On 27th march 1989 commercial paper in india was introduced by rbi in the indian money market.
The recent financial crisis affected almost all the major economies around the globe. If the discount is 1 and other charges worth 15000 were applicable. In india commercial banks were the subscribers of almost 80 of all commercial paper issues but that trend has been declining and as in the u s mutual funds are becoming the prominent investors.
Commercial paper is defined as a money market instrument that is used for obtaining short term funding and is usually in the form of a promissory note issued by investment grade banks and corporations. Commercial paper is a money market security issued sold in the commercial paper market by large corporations to obtain funds to meet short term debt obligations for example payroll and is backed only by an issuing bank or company promise to pay the face amount on the maturity date specified on the note. A commercial paper in india is the monetary instrument.
A business entity issues a commercial paper worth 1000000 which will be redeemable after completion of 100 days.