Technical Guide on Internal Audit of Treasury ... - CAalley.com

<strong>Technical</strong> <strong>Guide</strong> on Internal Audit of Treasury Function in Banks
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• It is issued as per RBI guidelines. (Refer “Master Circular on
<strong>Guide</strong>lines for Issue of Commercial Paper” dated July 1, 2009.)
• It is issued at a discount to face value
• It can be issued either in the form of a promissory note or in a
dematerialised form.
• It attracts issuance stamp duty in primary issue.
• It has to be mandatorily rated for issuance by one of the four
credit rating agencies.
• It can be issued for maturities between a minimum of seven
days and a maximum upto one year from the date of issue.
Call Linked Products
• Corporates can participate both as lenders and borrowers.
• It can be issued for a maximum period of 89 days.
• Pricing is linked to a benchmark like, MIBOR.
• Flexible call or put option could be exercised.
Certificates of Deposit (CD)
• Certificate of Deposits (CDs) are unsecured, negotiable money
market instrument usually issued at a discount on face value.
(Refer to RBI Master Circular on <strong>Guide</strong>lines for Issue of
Certificates of Deposit dated July 1, 2009.)
• The maturity period is from 7 days to 12 months.
• It attracts issuance stamp duty and is issued in dematerialised
form or as a Usance Promissory note. .
• They are negotiable, and transferred by endorsement and
delivery, after 15 days of issue.
Collateralised Borrowing and Lending Obligations (CBLO)
• CBLO is a money market instrument designed to meet the
borrowing and lending needs of banks, financial institutions,
mutual funds, NBFCs and corporates.
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