More Stories

Informist, Thursday, Mar. 27, 2025

By Siddhi Chauhan

MUMBAI – Issuances of certificates of deposit surged on Thursday as banks rushed to garner funds to meet the year-end surge in credit disbursements, dealers said. However, in the commercial paper segment, most of the issuers remained on the sidelines due to expectation of a fall in short-term debt rates in the coming days, dealers said.

Indian financial markets are closed Monday for Eid and on Tuesday for year-end closing of accounts of banks, leaving Thursday and Friday for banks to meet their disbursement needs, dealers said. Canara Bank tapped the market for the second consecutive day, raising INR 20.00 billion through a one-year paper at 7.30%. HDFC Bank was the other issuer in the market. The bank raised INR 45.00 billion through three different papers.

India's largest private-sector lender raised INR 5.00 billion through a three-month paper at 7.36%. The bank raised INR 10.00 billion and INR 30.00 billion through one-year papers at 7.35% and 7.40%, respectively. The rates for one-year CD have inched down to 7.30-7.35%, from 7.40-7.45% earlier in the week. 

At the upcoming monetary policy review meeting in April, market participants widely anticipate another 25-basis-point cut in the repo rate, encouraged by the lower-than-expected CPI inflation figure for February. This view is also expected to weigh on rates going forward.

In the commercial paper segment, a mere INR 6.50 billion was raised on Thursday. There were no issuances on Wednesday. Bajaj Housing Finance was the largest issuer, raising INR 4.00 billion through a three-month paper at 7.57%. "Most of the issuers have met their demand for this month. A few issuers who want to borrow are waiting for rates to cool off," a dealer at a brokerage firm said.  

Dealers said issuances were low overall because of improved liquidity conditions in the banking system. As per data by the Reserve Bank of India, the net liquidity injected by the central bank--a proxy for liquidity conditions--declined further to INR 407.88 billion Wednesday, the lowest level since Mar. 4, from INR 1.57 trillion Tuesday. The fall in net liquidity injected was because of inflows from the settlement of the $10.04 billion dollar/rupee buy/sell swap auction conducted Monday. The settlement of the swap that took place Wednesday would have added INR 900 billion into the banking system, dealers said.

--Primary market

* Canara Bank and HDFC Bank raised funds via CD.

* Bajaj Housing Finance, Bajaj Finance Securities, Kotak Securities, and Axis Finance raised funds via CPs.

--Secondary market

* Small Industries Development Bank of India's CD maturing on Mar. 26, 2026 was traded three times at a weighted average yield of 7.3916%.

* National Bank for Agriculture and Rural Development's CP maturing on Apr. 23 was traded twice at a weighted average yield of 8.0506%

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 Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.