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Informist, Tuesday, Jan. 13, 2026

By Vaishali Tyagi

NEW DELHI – Issuances of certificates of deposit surged Tuesday driven by big-ticket borrowings, as banks flocked to the short-term debt market to roll over their maturing papers, dealers said. Primary borrowing through CDs was INR 42 billion Tuesday against nil on Monday.

Axis Bank was the largest issuer. The bank raised INR 25 billion through CD maturing in one year at 6.96%. Punjab National Bank borrowed INR 17 billion through two CD issuances. The bank raised INR 10 billion through one-month CD at 6.15% and INR 7 billion through a three-month CD at 6.65%.

Some banks are tapping the market to meet their rollover requirements despite rates being high, dealers said. They are selectively raising funds if rates are favourable and investors are comfortable with those offers, otherwise issuers are exploring alternative avenues, dealers said. This has led to fluctuation in trading volumes, with some days seeing good activity and others remaining subdued. Overall, market sentiment is mixed, they said.

Borrowing costs on three-month CDs rose to 6.62-65% Tuesday from 6.56-6.61% on Monday. Rates on six-month CD rose marginally to 6.73-6.76% from 6.72-6.75% Monday, while rates on one-year CD were broadly unchanged from Monday at 6.86-6.95%.

Rates surged further Tuesday as market sentiment turned negative after Bloomberg Index Services said it aims to keep the review of India's fully accessible route government bonds for inclusion in its flagship Global Aggregate Index "open and ongoing", and plans to provide the next update on the potential inclusion by mid-2026.

Low liquidity in the banking system contributed further to the rise in rates. Dealers expect rates to ease once liquidity improves. The net liquidity absorbed from the banking system by the Reserve Bank of India--a proxy for the liquidity surplus--was INR 164.11 billion Monday, down from INR 298.72 billion Sunday. Payment of INR 290 billion for gilts purchased at the gilt auction Friday drained liquidity Monday.

Overall fundraising through commercial papers remained tepid due to higher rates, dealers said. Fundraising through CPs fell to INR 9.25 billion from INR 13 billion on Monday. Axis Securities was the largest CP issuer. It raised INR 5 billion through an intra-month maturity paper at 6.30%. Bajaj Finance borrowed INR 2 billion by issuing three-month paper at 6.95% and Godrej Industries raised INR 2.25 billion at 7.00% through CP maturing in three months. Rates on three-month papers issued by non-banking financial companies rose to 6.75-6.90% Tuesday from 6.70-6.75% on Monday.

--Primary market

* Axis Securities, Bajaj Finance, and Godrej Industries raised funds through CPs

* Punjab National Bank and Axis Bank raised funds through CDs

--Secondary market

* UCO Bank's CD maturing Wednesday was traded twice at a weighted average yield of 5.2933%

* Julius Baer Capital India's CP maturing Wednesday was traded twice at a weighted average yield of 5.4393%

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

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