Question
What should be the minimum duration for which a
certificate of deposit can be issued?Solution
Certificate of Deposit is a negotiable instrument issued in 1989 for the first time and it is issued against funds deposited with a bank or financial institution. The scheduled commercial banks (excluding the RRBs and the Local Area Banks) and All-India Financial Institutions can issue such CDs. The minimum amount should be Rs 1 lakh whereas the duration should not be less than 7 days and not more than a year.
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