Here we explain about CP,T-bills,CD, MICR,IFSC,KYC and PIN-
Commercial Paper (CP): It is an unsecured money market instrument issued in the from of promissory note. Issued by Corporates, Primary dealers and All-India Financial Institutions
Maturity Period of CP: Minimum- 7days , Maximum- up to one year. It can be issued in denominations of Rs.5lakh or multiple of its thereafter. Invested by Individuals banking companies, other registered corporate and unincorporated bodies, Non-Resident Indians and Foreign Institutional Investors etc.
Treasury Bills (T-bills): It is secured money market instrument issued by central government , Government of India mainly issued three types of T-bills for 91days,182days and 364days While State government no issued any treasury bills. Issued in minimum denominations Rs.25 thousands and thereafter multiple of Rs.25thousands.
Certificate of Deposit (CD): It is negotiable and issued as a Usance Promissory Note or in dematerialized form against funds deposited at a bank other eligible financial institution for a specific period. It can be issued by scheduled commercial banks and all-inda financial institutions that have been permitted by RBI to rates short-term resources within the umbrella limit fixed by RBI.
Maturity period of CD: minimum-7days,Maximum - not more than one year but financial institutions can issue not less than one year and exceeding three years from issued date.
Denominations of issue CD: minimum amount one lakh and thereafter multiple of one lakh.
MICR: Full name Magnetic ink character recognition , it is 9 numeric digit code which uniquely identifies a bank branch participating in the electronic clearing service credit scheme . Example- 500339218 - here first three digit (500) represent the city. Next three digit (339) represent the branch. and Last three digit (218) represent the branch name head quarter.
IFSC: Full name Indian financial system code, it is an alpha-numeric code that uniquely identifies a bank-branch participating in the NEFT system. This is 11 digit code Example-SBIN0005824 - Here first four character SBIN- refers to State Bank of India. 5th 0 is control number and last six character (005824) represent the bank branch.
KYC: Full name Know your Customer, RBI introduced KYC in Banking sector under section 35(A) of Banking Regulation Act 1949 in August 2002 to identity the people who wants to transect with any bank and to know about the customer before opening an account .This process involves verification of customers address proof and identification proof.
Objectives of KYC: (i) To prevent money transfer to and from illegal activities. (ii) To prevent money laundering. About Money Laundering: Acquiring, Owing, Transferring of money earned through crime or knowingly entering into any transection related to crime within or outside India is process of conversion of illegally obtained money.
PIN: Full name Personal identification number, it is secret numeric password shared between a system and a user that can be use to authenticate the user to the system.
PAN(Permanent Account Number) : The Income Tax Department in India has made it mandatory for all Indians to have Permanent Account Number irrespective of their tax filling since May 2010.