Which of the following is issued by commercial banks at a discount on face value?

Correct Answer: Certificates of deposits

Explanation:

Let us understand the key characteristics of the financial instruments listed:

1. Certificates of Deposit (CDs): A Certificate of Deposit is a negotiable, unsecured money market instrument issued by scheduled commercial banks (and select financial institutions) in India. It is issued at a discount on its face value and redeemed at par upon maturity.

2. Commercial Papers (CPs): Commercial Papers are short-term unsecured promissory notes issued by highly rated corporate bodies, primary dealers, and financial institutions to raise short-term funds, rather than being issued by commercial banks to their depositors.

3. Treasury Bills (T-Bills): Treasury Bills are issued by the Reserve Bank of India (RBI) on behalf of the Central Government of India to meet short-term mismatch in receipts and expenditure.

4. Promissory Notes: These are general financial instruments containing a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Therefore, Certificates of deposits are money market instruments specifically issued by commercial banks at a discount to their face value.