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Informist, Friday, Jan. 9, 2026

 

By Vaishali Tyagi

 

NEW DELHI – Fundraising through short-term debt instruments fell Friday with most issuers staying on the sidelines as there was a slight uptick in borrowing rates, dealers said. Rates rose due to muted participation by mutual funds, which are usually the most active participants in the market, they said. Mutual funds refrained from actively investing in the debt instrument due to low liquidity in the banking system.

 

The net liquidity injected into the banking system by the RBI – a proxy for the liquidity deficit – was INR 193.10 billion Thursday, compared with net absorption of INR 353.84 billion on Wednesday. 

 

Market participants said only issuers with rollover needs were tapping the market, as they were uncomfortable with current high rates. "Tight liquidity these days is a problem, and everybody in the market is waiting to improve, which will bring rates down," a dealer at a brokerage firm said. "In the primary market, some quotes did not convert into deals, as some banks came to raise funds but were not successful in raising capital."

 

In the CD market, two banks together raised little over INR 70 billion, down from INR 148 billion Thursday, dealers said. Union Bank of India raised INR 67.5 billion through two CDs, while Bank of India raised INR 3 billion via one CD. The three-month CD rates were at 6.55-6.60% on Friday. Rates on the six-month CD were at 6.70-6.75% Friday, and on one-year CDs were at 6.85-6.95%, broadly unchanged from Thursday.

 

Aditya Birla Money was the sole issuer in the commercial paper market, raising INR 2 billion through a paper maturing in March. Dealers said due to tight liquidity in the system and lack of interest from mutual funds, corporates are abstaining from issuing CPs. Rates on three-month papers issued by non-banking financial companies were at 6.70-6.75% Friday, while rates on three-month CPs by non-banking finance companies were at 6.10-6.15% on Friday. 

 

--Primary market

* Aditya Birla Money raised funds through CPs

* Union Bank of India and Bank of India raised funds through CDs

 

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:

 

Certificates of deposit		Commercial paper
Friday	Thursday	Friday	Thursday
64.15	97.00	8.70	9.70

 

End

 

Edited by Saji George Titus

 

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