Explainer On Commercial Papers Soon, Says RBI

Mumbai: The Reserve Bank will soon come out with a concept paper on aggregation and dissemination of information surrounding commercial paper (CP) issuances, Deputy Governor H R Khan said on Tuesday.

"We will shortly come out with a concept paper on how do we aggregate and disseminate the information on commercial papers. This is something which we are looking at very seriously," Khan said during the post-policy concall with analysts.

To a question on lack of information on primary CP market, Mr Khan said two entities, including NSDL, have evinced interest in setting up the information and dissemination platform.

NSDL, he said, is a "near natural choice" given that it is already maintaining demat accounts and providing ISIN numbers. It can be noted that there has been a spurt in CP issues in the last few months, as corporates look for lower interest options for raising short-term money.

Meanwhile, in the analyst call, Governor Raghuram Rajan dismissed notions that the introduction of the marginal cost of funds-based lending rate (MCLR) is impacting banks' margins, and added the RBI will be soon reviewing the newly introduced system.

He said if at all some banks have been affected, the increase in volumes of loans under MCLR will eventually help protect their margins.

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