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
- Update internal CP policies to reference this master circular as the single source of guidelines.
- Ensure corporate CP issuers meet net worth ≥₹4 crore and have standard asset classification.
- 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.
Who it affects
Scheduled banks, Primary dealers, All-India financial institutions, Corporate CP issuers, Credit rating agencies
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.