Explain the following: (a) Certificate of Deposits

Certificate of Deposits (CDs): CDs are negotiable money market instruments issued in dematerialised form or as Usance Promissory Notes, against funds deposited at a bank or other eligible financial institution for a specified time period. Guidelines for the issue of CDs are governed by various directives issued by the Reserve Bank of India (RBI), as amended from time to time. CDs can be issued by: Scheduled commercial banks (excluding Regional Rural Banks (RRBs) and Local Area Banks (LABs)). Selected all-India Financial Institutions that have been permitted by RBI to raise short-term resources within the umbrella limit fixed by RBI.