DISCOUNT/COUPON RATE :

CDs may be issued at a discount on face value. Banks/FIs are allowed to issue CDs on the basis of floating rate provided the methodology of compiling the floating rate is objective transparent and market based. The issuing bank/FI is free to determine the discount/coupon rate. The interest rate on floating rate CDs would have to be reset periodically in accordance with a pre-determined formula that indicates the spread over a transparent benchmark.