Apart from CPs, corporates can also participate in another market called “Inter Corporate Deposits” (ICD) market.
An ICD is an unsecured loan extended by one corporate to another. This market allows corporates with surplus funds to lend to other corporates. Also the better-rated corporates can borrow from the banking system and lend in this market. As the cost of funds for a corporate is much higher than that for a bank, the rates in this market are higher than those in the other markets. Also, as ICDs are unsecured, the risk inherent is high and the risk premium is also built into the rates.
RBI permits Primary Dealers to accept Inter- Corporate Deposits upto fifty percent of their Net Worth (which in the case of SBI DFHI Ltd. comes to more than Rs. 500 crores) and that also for a period of not less than 7 days. Primary Dealers cannot lend in the ICD market.
SBI DFHI Ltd. has a scheme, SBI DFHI Money, through which Corporates can place ICDs with us. We take Inter Corporate Deposits based on the on-going rates of CBLO and Call Rates in the Money Market. If you are a corporate with short term surplus funds, we can help you earn good returns. Place Rs. 5 crores and above with us for periods starting from a minimum of 7 days in the form of Inter Corporate Deposits (ICD) and earn high returns. ICD’s placed with us will enable you to earn interest on very short term floats with zero risk to your funds.