"As a matter of precaution, they are preferring to restrict their investments to the best companies even among the companies with the top ratings," he said.

Dealers said there were expectations of easy cash availability in December after the Reserve Bank of India (RBI) announced several liquidity measures in its mid-term review of its credit policy. The RBI said it will treat cash in banks' vaults as eligible CRR balances from December 1.

This was likely to ease demand for cash by around Rs 45 billion, dealers said. It also introduced a special liquidity support to banks during the millennium transition period against their excess holdings of treasury bills and government securities at 2.5 percent over the bank rate.

"Though the CP market has shown some signs of revival in the last two days I don't see this revival sustaining since it will be restricted to investments in top notch companies alone," a dealer with a brokerage said.

"Banks are comfortable with these investments where they can exit easily in case of a crisis," he said. On Monday, two companies from the Tata group placed CPs carrying interest in the range of 10.40-10.48 per cent, he said.Truck maker Tata Engineering and Locomotive Company placed a 90-day commercial paper worth Rs 200 million at a coupon of 10.48 per cent. The deal was for settlement on Friday.

Soda ash and urea maker Tata Chemicals struck a deal to place a 90-day CP worth 300 million at 10.40 per cent. The deal was for value November 29.Both the instruments have been rated P1+ by the Credit Rating Information Services of India.