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Informist, Tuesday, Jan. 20, 2026

By J. Navya Sruthi

MUMBAI – The volume of certificates of deposit and commercial papers in the secondary markets was up Tuesday as banks and mutual funds traded the short-term debt instruments aggressively, dealers and fund managers said. 

Trading volume of CDs in the secondary market was INR 89.18 billion, up from INR 76.30 billion Monday, and that of CPs was sharply higher at INR 46 billion from INR 16.25 billion Monday. Similarly, volumes of CPs and CDs in the primary market also rose Tuesday. There were five CP issuances and two CD issuances Tuesday, higher than one CD and two CP issuances Monday, dealers said. 

National Bank for Agriculture and Rural Development raised INR 100 billion through CDs maturing in one year at 7.22% and Union Bank raised INR 60 billion through CDs maturing in early March at 6.55% Tuesday. ICICI Securities raised INR 1 billion through CPs maturing in six months at 7.40% and Birla Group Holding raised INR 6.75 billion through one-year CPs at 7.89%, dealers said.

Meanwhile, borrowing costs on three-month CDs rose to 7.05-7.10% Tuesday from 6.90-7.00% Monday. Indicative rates on three-month CPs issued by manufacturing companies were also higher at 7.15-7.20% Tuesday from 7.05—7.10% Monday and similarly, those on three-month CPs issued by non-banking financial companies were up around 7.60% from 7.50-7.55% Monday. 

"Liquidity issue caused by GST (goods and services tax) outflows is weighing on short-term (three-month) papers," a dealer at a private sector bank said. The net liquidity absorbed from the banking system by the Reserve Bank of India – a proxy for liquidity surplus – was INR 818.62 billion, down from INR 1.23 trillion Sunday. A few call dealers expect that systemic liquidity may fall to a deficit by Wednesday due to pressure from GST outflows. The market expects INR 1.5 trillion to INR 1.8 trillion of outflows for GST payments. Higher supply of three-month papers is also supporting yields, a dealer at a state-owned bank said.    

Meanwhile, indicative rates on six-month and one-year CDs were higher from the previous day at 7.15-7.20% and 7.20-7.25%, respectively, Tuesday. "Rates (on six-month and one-year papers) are expected to stabilise at this level," a fund manager at a fund house said.

"A few mutual funds and banks were mostly on buying side today (Tuesday) as these levels (rates) are attractive," a dealer at a state-owned bank said. "Banks are not comfortable with current rates which market wants on one-year and six-month CDs. So supply in these segments is unlikely to grow and that will lead to a fall in rates," the dealer said. However, it is a completely opposite case with the three-month papers, as supply is expected to rise as banks and corporates prefer this segment for now, the dealer added. 

--Primary market

* National Bank for Agriculture and Rural Development, Union Bank, raised funds through CDs

* ICICI Securities, Tata Projects, Birla Group Holdings, HDFC Securities, Godrej Securities raised funds through CPs

--Secondary market

* LIC Housing Finance's CP maturing Wednesday was traded four times at a weighted average yield of 5.3298%

* Canara Bank's CD maturing Wednesday was traded five times at a weighted average yield of 5.2957%

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

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Tanima Banerjee

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