More Stories

Informist, Monday, Jan. 19, 2026

By J. Navya Sruthi

MUMBAI – Rates on certificates of deposits and commercial papers rose due to weak market participation amid low liquidity surplus in the banking system and cash crunch with mutual funds, dealers said. They said rates are likely to rise further by 5 to 10 basis points during this week on scheduled outflows for goods and services tax payments.     

Borrowing costs on three-month certificates of deposit rose to 6.90-7.00% Monday, higher from 6.75-6.85% Friday. Rates on six-month CDs surged further to 7.10-7.15% Monday from 6.90-7.00% Friday, while indicative rates on one-year CDs were at 7.05-7.10%, against 6.97-7.05% Friday.

Dealers expect mutual funds to remain on the sidelines until liquidity in the banking system is comfortable. "Mutual funds do not have cash as they did not receive inflows from banks this time. Currently, there is a cash crunch with banks because of high spot intervention (RBI selling dollars) and CD (credit-deposit) ratio which is at 81%," a dealer at a private bank said. "Rates will remain higher and rise further by 5-10 bps over next couple of days because of GST outflows. Later, we have another OMO and there might be a short-term VRR (variable rate repo) which will stabilise rates at that level," the dealer said.

On Monday, there was a single certificate of deposit issuance by HDFC Bank, which raised INR 20 billion at 6.5% through CDs maturing on Mar. 9. The bank issued CDs, as the CDs worth INR 3.55 billion with weighted average yield of 4.9985%, will be maturing Thursday. Small Industries Development Bank of India was looking to raise INR 40 billion through one-year CDs but the deal did not happen as there were only INR 10 billion worth bids, a dealer at a state-owned bank said. "Not much buying was there in market today (Monday)," the dealer said. 

Trading volume in the secondary market also fell to INR 76.30 billion Monday from INR 92.45 billion Friday. Volumes were low in both primary and secondary markets due to more demand for funds amid GST payments, which kept major corporates and mutual funds away from the markets. Call market dealers expect outflows around INR 1.8 trillion for GST payments starting Monday. 

Overnight borrowing rates were also on a higher side Monday, with the weighted average call rate at 5.40% despite liquidity surplus in the banking system. The net liquidity absorbed from the banking system by the RBI--a proxy for the liquidity surplus--was INR 1.23 trillion Sunday, down from INR 1.25 trillion Saturday. 

The dealer at the private bank said that the market was waiting for details on the government's borrowing for 2026-27 (Apr-Mar) and the RBI's next monetary policy committee meeting, both due in February. "While the market also expects (INR) 11.50 trillion net borrowing for next (financial) year and fiscal deficit of around 4.5%, we need more clarity on borrowing through what papers and supply," the dealer said.   

Meanwhile, indicative rates on three-month CPs issued by non-banking financial companies were at 7.50-7.55% Monday, against 6.78-6.92% Friday and those on manufacturing companies' CPs were 7.05—7.10%. Julius Baer Capital raised INR 3.50 billion through one-year CPs at 7.88% and ICICI Securities raised INR 1.50 billion through six-month CPs at 7.40%, dealers said. Volume in the secondary market of CPs was at INR 16.25 billion down from INR 27.50 billion Friday. 

--Primary market

* HDFC Bank raised funds through CDs

* Julius Baer Capital, ICICI Securities raised funds through CPs

--Secondary market

* National Bank for Agriculture and Rural Development's CD maturing Tuesday was traded nine times at a weighted average yield of 5.3241%

* IndusInd Bank's CD maturing Tuesday was traded seven times at a weighted average yield of 5.4028%

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 Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.