INSUBCONTINENT EXCLUSIVE:
commercial paper market as the funds to be set aside in relation to the cost of borrowing makes recourse to the instrument unviable for
them.
Commercial paper issuances were at ?57,065 crore in October 2019, as per data with Prime Database
Cumulative issuances during the first seven months of the current fiscal were at ?7.78 lakh crore, 7.7 per cent lower than the corresponding
period a year ago.
In terms of sectoral break-up, NBFCs recorded the steepest decline of 4 per cent followed by decline of 2.25 per cent in
Also, the kind of liquidity cover that we have to maintain for short-term loans renders the less than 90-day borrowing completely
must be held separately in liquid assets
So, if an NBFC borrows ?100 crore from the CP market, it must keep ?20 crore in liquid assets, which renders the instrument unfeasible.
The
cost of borrowing via commercial papers has seen a significant decline from the peaks touched in mid-2018-19
cost of borrowing via commercial papers declined further in October 2019, making it the fifth consecutive month of declining rates
