If competitive forces encourage too many banks to choose for the IRB approaches, then more careful attention would have to be paid to the risk weights under the standardized approach and to the associated incentives built into the IRB approaches.
This process may enable smaller firms even with higher risks to access the CP market. Traditionally, banks use ABCP as a liquidity management instrument. This is under examination of RBI. •  Reference rate: At present, issuers decide on the discount rates of their CPs taking into account the Reuters/Telerate CP reference rate as well as the supply-demand forces prevailing in the market.