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Informist, Tuesday, Sept. 30, 2025

By Shravani Chandiwade

MUMBAI – Ample liquidity surplus and low funding needs kept banks from tapping the certificates of deposit market Tuesday. In the commercial paper market, companies engaged only in need-based borrowing, dealers said.

As per latest data from the Reserve Bank of India, the central bank net absorbed INR 550.06 billion from the banking system Monday, which is a proxy for systemic liquidity surplus, higher than INR 469.41 billion on Sunday. Dealers said this was adequate as there were no major outflows scheduled and the government's month-end spending continued to add liquidity to the banking system. No banks issued CDs on Tuesday, the end of the quarter, with most having met their roll-over needs earlier in the month, dealers said.

"This is the quarter-end period. So, no banks leave their roll-over needs for the last minute because they have other important things to manage during this period," a dealer at a state-owned bank said.

Indicative rates for three-month CDs were 5.85-5.90%, down from 5.90-5.95% Monday. Yields on papers with six-month and one-year maturities remained unchanged from Monday. Yields on six-month tenure CDs were 6.10–6.15%, and those on one-year papers were 6.35–6.40%, dealers said.

On the commercial paper front, only three companies tapped the market to raise funds Tuesday. Kotak Securities was the only non-banking financial company to borrow through CP, and it was also the largest issuer among the participants Tuesday. The company raised INR 5 billion through three-month paper at 6.69%.

The rest of the issuances were from two manufacturing companies – Avenue Supermarts and Indian Oil Corp. Ltd. The former raised INR 2 billion through a three-month paper at 6.00% and the latter raised INR 2.50 billion via two-month paper at 5.78%.

Indicative rates for three-month papers issued by non-banking financial companies were unchanged from Monday at 6.65-6.70%, and yields on similar-term papers issued by manufacturing companies were also unchanged from Monday at 5.95-6.00%.   

--Primary market

* Kotak Securities, Indian Oil Corp., and Avenue Supermarts raised funds through CPs.

* No banks raised funds through CDs.

--Secondary market

* HDFC Bank's CD maturing Wednesday was traded three times at a weighted average yield of 5.6584%.

* HDFC Securities CP's maturing on Oct.10 was traded once at a weighted average yield of 6.5489%.

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

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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