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ARTICLE · 01 SEPTEMBER 2017

Commercial Paper Directions: Amendments Introduce Enhanced Disclosures

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The Reserve Bank of India (RBI) introduced the Commercial Paper Directions, 2017 (Directions) on 10 August 2017. The primary purpose of the Directions is to regulate commercial papers (CPs) accepted as deposits by non-banking companies.

IndiaFinance and Banking
Manisha Shroff
Manisha Shroff
Madhuparna Dasgupta
Madhuparna Dasgupta
Meenakshi Kurpad
Meenakshi Kurpad
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The Reserve Bank of India (RBI) introduced the Commercial Paper Directions, 2017 (Directions) on 10 August 2017. The primary purpose of the Directions is to regulate commercial papers (CPs) accepted as deposits by non-banking companies. The Directions supersede previous directions such as the Non-Banking Companies (Acceptance of deposits through Commercial Paper) Directions 1989, which had been amended in 1996, 1998, 2000 and further in 2012 (2012 Guidelines).

Section 45U of the Reserve Bank of India Act, 1934 (Act) includes 'Commercial Paper' as a money market instrument and the Directions define it as an unsecured money market instrument issued in the form of a promissory note, where the tenor of such commercial paper is between 7 (seven) days to 1(one) year.

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