Commercial paper

It is an unsecured money market instrument, usually issued by top-rated corporates to meet their working capital requirements. The instrument was introduced in 1990 to Indian borrowers and initially such issues were confined only to corporates. Subsequently, primary dealers were also permitted to issue CP to enable them to meet their short-term funding requirements. CP can be issued for tenors ranging from a minimum of 15 days to a maximum up to one year. CPs can also be traded in the secondary market by investors.