The mark-up over the anchor rate will be nil in the case of this short-term instrument. The floating rate will be re-set to the anchor rate on a daily basis, and will be on par with it. For example, if the 15 day interbank rate is 8 per cent on a particular day, a 15 day Quantum CorporateDeposit will carry a similar rate of interest for that day, before it is once again reset the next day. ICICI Bank has fixed a floor rate for Quantum Corporate.

This will be equivalent to the interest rate announced by the bank from time to time on deposits of comparable maturity on amounts Rs 1 crore and above, which is currently 6 per cent. The cap has been pegged to the Bank Rate, which is now at 9 per cent. Floor and cap rates would insulate depositors linking debt paper to call rates from the violent fluctuations in the market. Since Quantum Corporate is a very short-term deposit, it offers neither pre-mature withdrawal nor loan facilities, nor does it carry a call option. Although senior executives of the bank did not wish to comment either on the targeted amount or on the amount mobilised at this stage, they were optimistic about the quantum of funds that the deposit would mobilise through corporate subscription.

With call rates hovering between 6-8 per cent recently, call-linked debt paper hasbeen the flavour of the past two months, although Quantum Corporate has the shortest tenure of all. The short maturity brings down the basis risk that arises out of linking deposit rates to volatile call rates. Some other recent call-linked debt paper have been those floated by GE Caps, Larsen & Toubro, ACC and Reliance Industries. However, all the others have tenures longer than Quantum Corporate.