RBI tweaks norms on CPs, NCDs

Mumbai: The Reserve Bank of India (RBI) has tightened rules for the issuance of short-term Commercial Papers (CPs) and Non-Convertible Debentures (NCDs), with an initial maturity of up to one year.

The new norms, which come into effect from April 1, involve six key changes. The tenor of such short term CPs can’t be less than seven days or exceed a year, while those of NCDs can’t be less than 90 days or more than one year, the RBI said. As per the revised norms, CPs and NCDs issued from April 1 onwards will have a minimum denomination of Rs5 lakh and in multiples of Rs5 lakh thereafter. Both these debt instruments cannot be issued with options, while the settlement must be done within a period not exceeding T+4 working days, as per the new rules issued on Thursday.