Commercial paper

Short-term unsecured borrowing issued by companies, typically for tenors under a year, bought mainly by mutual funds and banks.

It is the cheapest wholesale funding available in normal conditions, which is exactly why it becomes dangerous. A lender that funds long-dated loans with paper it must roll every ninety days has taken on a refinancing risk that costs nothing until it costs everything.

Indian non-bank failures have repeatedly shared this shape: a growing book, a heavy reliance on short paper, and a market that stopped rolling.

Read the borrowing mix alongside the maturity profile. A concentration here is the flag.