Stocks Observer. com

By Shahid Iqbal KARACHI: Banks and Development Financial Institutions (DFIs) have been allowed to invest in commercial papers to help the corporate sector to get short-term financing to overcome the liquidity problem. In order to develop and broaden the money market and also to provide an additional financial instrument to investors, it is considered desirable to allow highly rated companies to diversify their sources of short-term financing by issue of commercial paper (CP) as an instrument of redeemable capital. The State Bank on Saturday issued a circular introducing amendment in the Guidelines of Commercial Papers. ‘The banks and DFIs may make investment in Commercial Paper (CP) as per policy approved by their board of directors and keeping in view the bank’s and DFI’s equity,’ said the SBP circular. Earlier, banks and DFIs interested in investing in CP were required to obtain one time prior approval from SBP for commencing or undertaking such activity. According to the guidelines