The Reserve bank of India through its notification dated 16th August, 2019 has issued directions relating to accepting of deposit by issue of commercial paper.
Regulation 6 speaks about acceptance of deposits by person other than authorised dealers /authorised bank. Sub regulation 3 of Regulation 6 specifies in what terms companies may accept deposit through issues of commercial paper.
This Sub-regulation 3 has been reviewed vis-à-vis other statue Statutes/Regulations. Section 45 U(b) of RBI Act, 1934 describes Commercial Paper as one of the Money Market Instruments and Section 2(c) of Companies (Acceptance of Deposits) Rules, 2014 excludes any amount received against issue of, inter alia, Commercial Papers from definition of deposits.
In order to bring in consistency statutory provisions relating to commercial papers, sub-regulation 3 of regulation 6 has been deleted through notification dated July 16, 2019. Therefore, the Authorised dealer category-I Bank shall bring the content of this circular to the notice of their customers.
Click here to read the notification.