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Informist, Thursday, Jan. 8, 2026

By Vaishali Tyagi

NEW DELHI – Primary market issuances of certificates of deposit surged on Thursday on big-ticket borrowing by Bank of Baroda, National Bank for Agriculture and Rural Development and Indian Bank amid low liquidity in the banking system, dealers said. Issuances of CDs rose to over INR 148 billion from INR 102 billion on Wednesday as NABARD raised INR 50.0 billion through papers maturing in one year at 6.90%, Kotak Bank tapped the market to raise INR 30 billion via one-year CDs at 6.80%, while Bank of Baroda borrowed INR 25 billion by issuing one-year CDs at 6.84%. 

Canara Bank raised INR 20.0 billion through one-year paper at 6.85%, while Indian Bank raised INR 16.50 billion by issuing CDs maturing in one year at 6.82%. Union Bank and AU Small Finance Bank also tapped the short-term debt market to fulfil their funding requirements and rollover requirements, dealers said. The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – was INR 353.84 billion on Wednesday, down from INR 801.34 billion Tuesday. 

Dealers said that borrowing rates rose due on banks' funding needs amid the liquidity crunch due to reduced surplus and increased demand for funds. The three-month CD rate rose to 6.55-6.60% on Thursday from 6.50% on Wednesday due to higher demand of funds. Rates on the six-month CD were at 6.70-6.75% Thursday, that on one-year CDs were at 6.85-6.95%, broadly unchanged from Wednesday, respectively.

Commercial paper issuances rose to INR 4 billion Thursday from INR 2.75 billion on Wednesday. Only two companies raised funds through CPs. Tata Projects and Godrej Industries borrowed INR 2 billion each through CPs maturing in three months. Tracking rates in CDs, rates in CPs also rose and these two CPs were issued at slightly higher rates, dealers said. 

Rates on similar maturity papers issued by non-banking financial companies were at 6.70-6.75% Thursday higher from Wednesday's 6.66-6.77%. Similarly, rates on three-month CPs by non-banking finance companies were at 6.10-6.15% on Thursday. 

Following were the volumes, in INR billion, in the secondary market for short-term debt at 1731 IST, as detailed by the Clearing Corp. of India's F-TRAC platform:

End

Edited by Deepshikha Bhardwaj

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