Commercial Paper (CP) is a short-term money-market security sold by usually large corporations for financing working capital such as account receivables and inventories. Such investment tool is getting popularity among companies due to low cost and easy access, but there was no specific guideline about such investment. In this perspective, the central bank issued the guideline through a circular to supervise commercial paper investment, said a senior executive of Bangladesh Bank. The debt-equity ratio of the issuer must be maximum 70:30 while banks investment in a single issue of CP shall not exceed 20% of the respective issue. The guideline also instructed banks to have written guidelines approved by their board of directors for dealing with CPs.

Source: Dhaka Tribune September 25, 2016 19:30 UTC