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Informist, Monday, Mar. 24, 2025

By Siddhi Chauhan

MUMBAI – Borrowing through certificates of deposit rose on Monday to INR 31.50 billion against no CD issuances on Friday. Borrowing through commercial papers also rose to INR 53.25 billion against INR 46.00 billion on Friday.

Small Industries Development Bank of India was the largest CD issuer on Monday, raising INR 21.00 billion through a one-year paper at 7.41%. Indian Bank also raised INR 10.00 billion through a one-year paper at 7.36%.

According to market participants, banks preferred to raise funds through one-year paper due to elevated rates in the three-month segment. "We have already started seeing the rates have moderated in the one-year segment because going forward market is looking at ease in liquidity," a dealer at a private bank said. "March is still a bit of a tight month, so rates are taking time to cool off."

Companies tapped the CP market due to rollover demand, dealers said. Export-Import Bank of India was the largest CP issuer raising INR 25.00 billion through six-month paper at a rate of 7.50%. On Friday, Reliance Jio Infocomm was the largest issuer, raising INR 20.00 billion via a three-month paper at 7.58%.

Rates on three-month CDs remained unchanged at 7.55-7.65% on Monday. Rates on three-month CPs of non-banking finance companies were unchanged from the previous day at 7.82-8.03%. Rates on CPs issued by manufacturing companies were at 7.65-7.85%.

Dealers said rates are still high and are expected to ease in April as liquidity conditions improve. 

The net liquidity injected by the Reserve Bank of India, a proxy for liquidity deficit, was INR 2.61 trillion on Saturday, the highest since Jan. 27. Liquidity conditions on Sunday were unchanged from the previous day's figure. Going forward, liquidity conditions are expected to see some relief as the RBI conducted a $10-billion dollar/rupee buy/sell swap auction on Monday. The RBI will also buy gilts worth INR 500 billion on Tuesday through an open market operation auction.

--Primary market

* National Bank for Agriculture and Rural Development, Godrej Industries, ICICI Securities, Motilal Oswal Financial Services, Bajaj Financial Securities, Sundaram Finance, Axis Securities, and Export-Import Bank of India raised funds via CPs.

* Indian Bank, HDFC Bank and Small Industries Development Bank of India raised funds via CDs.

--Secondary market

* Bank of India's CD maturing on May 9 was traded 10 times at a weighted average yield of 7.7996%.

* Export-Import Bank of India's CP maturing on May 7 was traded eight times at a weighted average yield of 7.7999%

The following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed by the Clearing Corp. of India's F-TRAC platform:

End

Edited by Saji George Titus

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