What is Commercial Paper (CP) Definition And Meaning
The commercial paper (CP) is issued by companies with a net worth of Rs. 5 crores. The CP is issued in multiples of Rs. 25 lakhs subject to a minimum issue of Rs. 1 crore. The maturity of CP is between 3 to 6 months. The CPs are issued at a discount rate is freely determined.
The maximum amount of CP that a company can raise was limited to 20% (now raised to 30%) of the maximum permissible bank finance. The purpose of introducing CP is to enable high-level corporate borrowers to diversify their sources of short-term borrowings on the one hand, and provide an additional instrument to the banks and financial institutions in the money market, on the other.
The commercial paper (CP) is issued by companies with a net worth of Rs. 5 crores. The CP is issued in multiples of Rs. 25 lakhs subject to a minimum issue of Rs. 1 crore. The maturity of CP is between 3 to 6 months. The CPs are issued at a discount rate is freely determined.
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The maximum amount of CP that a company can raise was limited to 20% (now raised to 30%) of the maximum permissible bank finance. The purpose of introducing CP is to enable high-level corporate borrowers to diversify their sources of short-term borrowings on the one hand, and provide an additional instrument to the banks and financial institutions in the money market, on the other.
What is a Commercial Paper Definition And Meaning
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