CERTIFICATE OF DEPOSITS
This scheme was introduced in July 1989, to enable the banking system to mobilise bulk deposits from the market, which they can have at competitive rates of interest.The major features are:
Who can issue
Scheduled commercial banks (except RRBs) and All India FinancialInstitutions within their `Umbrella limit’.
Applicable on the issue price in case of banks
Individuals (other than minors), corporations, companies, trusts, funds,associations etc
Min: 7 days Max : 12 Months (in case of FIs minimum 1 year and maximum3 years).
Min: Rs.1 lac, beyond which in multiple of Rs.1 lac
Market related. Fixed or floating
Against collateral of CD not permitted
Transfer Endorsement & delivery.
Nature Usance Promissory note.
Can be issued in Dematerialisation form only onlywef June 30, 2002
• If payment day is holiday, to be paid on next preceding business day• Issued at a discount to face value• Duplicate can be issued after giving a public notice & obtaining indemnity
Features of CD
All scheduled banks (except RRBs and Co-operative banks) are eligible to issueCDs.
They can be issued to individuals, corporations, trusts, funds and associations.
NRIs can also subscribe to CDs, but on non-repatriable basis only. In secondarymarket such CDs cannot be endorsed to another NRI.