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![BASIS COMMERCIAL PAPER CERTIFICATE OF
DEPOSIT
DEFINITION Commercial Paper (CP) is an unsecured
money market instrument issued in the form
of a promissory note. CP, as a privately
placed instrument, was introduced in India in
1990 with a view to enable highly rated
corporate borrowers to diversify their sources
of short-term borrowings and to provide an
additional instrument to investors
Certificate of Deposit (CD) is
a negotiable money market
instrument and issued in
dematerialised form or as a
Usance Promissory Note
against funds deposited at a
bank or other eligible financial
institution for a specified time
period.
ELIGIBLE
ISSUERS
Corporates, PDs and all-India financial
institutions
(i) scheduled commercial
banks {excluding Regional
Rural Banks and Local Area
Banks
(ii) select All-India Financial
Institutions (FIs)
RATING
REQUIREMENT
The minimum credit rating shall be ‘A2’ [As
per rating symbol and definition prescribed by
Securities and Exchange Board of India
(SEBI)].
CRAs-ICRA,CRISIL,FITCH,CARE
NO SUCH REQUIREMENT
MATURITY minimum of 7 days and a maximum of up to
one year from the date of issue
not be less than 7 days and
not more than one year, from
the date of issue.
DENOMINATION CP can be issued in denominations of Rs.5
lakh or multiples thereof.
the minimum deposit that
could be accepted from a
single subscriber should not
be less than Rs.1 lakh
INVESTORS individuals, banking companies, other
corporate bodies (registered or incorporated
in India) and unincorporated bodies, Non-
Resident Indians and Foreign Institutional
Investors (FIIs).
individuals, corporations,
companies (including banks
and PDs), trusts, funds,
associations, etc. Non-
Resident Indians (NRIs) may
also subscribe to CDs, but
only on non-repatriable basis,](https://image.slidesharecdn.com/cpsvscds-130511134319-phpapp01/85/CPs-vs-CDs-1-320.jpg)
![BASIS COMMERCIAL PAPER CERTIFICATE OF
DEPOSIT
DEFINITION Commercial Paper (CP) is an unsecured
money market instrument issued in the form
of a promissory note. CP, as a privately
placed instrument, was introduced in India in
1990 with a view to enable highly rated
corporate borrowers to diversify their sources
of short-term borrowings and to provide an
additional instrument to investors
Certificate of Deposit (CD) is
a negotiable money market
instrument and issued in
dematerialised form or as a
Usance Promissory Note
against funds deposited at a
bank or other eligible financial
institution for a specified time
period.
ELIGIBLE
ISSUERS
Corporates, PDs and all-India financial
institutions
(i) scheduled commercial
banks {excluding Regional
Rural Banks and Local Area
Banks
(ii) select All-India Financial
Institutions (FIs)
RATING
REQUIREMENT
The minimum credit rating shall be ‘A2’ [As
per rating symbol and definition prescribed by
Securities and Exchange Board of India
(SEBI)].
CRAs-ICRA,CRISIL,FITCH,CARE
NO SUCH REQUIREMENT
MATURITY minimum of 7 days and a maximum of up to
one year from the date of issue
not be less than 7 days and
not more than one year, from
the date of issue.
DENOMINATION CP can be issued in denominations of Rs.5
lakh or multiples thereof.
the minimum deposit that
could be accepted from a
single subscriber should not
be less than Rs.1 lakh
INVESTORS individuals, banking companies, other
corporate bodies (registered or incorporated
in India) and unincorporated bodies, Non-
Resident Indians and Foreign Institutional
Investors (FIIs).
individuals, corporations,
companies (including banks
and PDs), trusts, funds,
associations, etc. Non-
Resident Indians (NRIs) may
also subscribe to CDs, but
only on non-repatriable basis,](https://image.slidesharecdn.com/cpsvscds-130511134319-phpapp01/75/CPs-vs-CDs-1-2048.jpg)
Uploaded byPuneet Arora
CPs vs CDs
Commercial paper (CP) and certificate of deposit (CD) are unsecured and negotiable money market instruments, respectively, introduced in India in 1990 for corporate borrowers and investors. CP can be issued by highly rated corporates and has a minimum maturity of 7 days and maximum of one year, while CDs are issued by banks and financial institutions with a minimum deposit of Rs. 1 lakh. Eligible investors include individuals, corporate bodies, trusts, and non-resident Indians on a non-repatriable basis.
CPs vs CDs
- 1. BASIS COMMERCIAL PAPERCERTIFICATE OF DEPOSIT DEFINITION Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note. CP, as a privately placed instrument, was introduced in India in 1990 with a view to enable highly rated corporate borrowers to diversify their sources of short-term borrowings and to provide an additional instrument to investors Certificate of Deposit (CD) is a negotiable money market instrument and issued in dematerialised form or as a Usance Promissory Note against funds deposited at a bank or other eligible financial institution for a specified time period. ELIGIBLE ISSUERS Corporates, PDs and all-India financial institutions (i) scheduled commercial banks {excluding Regional Rural Banks and Local Area Banks (ii) select All-India Financial Institutions (FIs) RATING REQUIREMENT The minimum credit rating shall be ‘A2’ [As per rating symbol and definition prescribed by Securities and Exchange Board of India (SEBI)]. CRAs-ICRA,CRISIL,FITCH,CARE NO SUCH REQUIREMENT MATURITY minimum of 7 days and a maximum of up to one year from the date of issue not be less than 7 days and not more than one year, from the date of issue. DENOMINATION CP can be issued in denominations of Rs.5 lakh or multiples thereof. the minimum deposit that could be accepted from a single subscriber should not be less than Rs.1 lakh INVESTORS individuals, banking companies, other corporate bodies (registered or incorporated in India) and unincorporated bodies, Non- Resident Indians and Foreign Institutional Investors (FIIs). individuals, corporations, companies (including banks and PDs), trusts, funds, associations, etc. Non- Resident Indians (NRIs) may also subscribe to CDs, but only on non-repatriable basis,