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Informist, Wednesday, Jan. 14, 2026

By Vaishali Tyagi

NEW DELHI – Borrowing through short-term debt instruments remained low Wednesday, with most issuers staying on the sidelines as there was a slight uptick in borrowing rates, dealers said. Rates rose due to muted mutual fund participation amid redemption pressure, they said.

Borrowing costs on three-month certificates of deposit rose to 6.69-6.73% Wednesday from 6.62-6.65% Tuesday. Rates on six-month CDs rose to 6.83-6.90% Wednesday from 6.73-6.76% Tuesday, while rates on one-year CDs were broadly unchanged from Tuesday at 6.86-6.97%.

Market participants said only issuers with rollover needs were tapping the market, as most issuers were uncomfortable with current high rates. "Tight liquidity these days is creating a problem for investors as they have very little cash to deploy funds, which is resulting in higher rates," a dealer at a brokerage said. "Traders in the market are waiting to improve liquidity and investors' appetite, which will bring rates down. Many mutual funds are facing redemption pressure. Therefore, they have less appetite to invest"

The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – was INR 1.01 trillion Tuesday, the highest since Dec. 15, compared with INR 164.11 billion Monday.

On Wednesday, the total fundraising through certificates of deposit fell to INR 25.50 billion from INR 42 billion Tuesday. The National Bank for Agriculture and Rural Development raised INR 12 billion through a one-year CD at 7.00%, while Union Bank borrowed INR 10 billion through two different CDs. Karur Vysya Bank raised INR 3.5 billion through March CD at 6.53%. 

Fundraising through commercial papers stood at INR 13.50 billion Wednesday. Bajaj Finance Securities was the largest CP issuer, raising INR 5 billion via a March-maturity CP at 6.85%, while Axis Securities borrowed INR 1.00 billion. Other issuers were Poonawal Fincorp and Julius Baer Capital.

Dealers said fundraising on Wednesday was by non-banking finance companies, who tapped the market to meet rollover requirements. Rates on three-month papers issued by non-banking financial companies rose to 6.78-6.90% Wednesday from 6.70-6.75% on Tuesday.

--Primary market

* Julius Baer Capital, Bajaj Finance, Axis Securities, and Poonawala Fincorp raised funds through CPs

* Union Bank, Karur Vysya Bank, and NABARD raised funds through CDs

--Secondary market

* Union Bank's CD maturing Friday was traded thrice at a weighted average yield of 5.3566%

* ICICI Securities's CP maturing Friday was traded four times at a weighted average yield of 5.4803%

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 Saji George Titus

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