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Informist, Friday, Jan. 23, 2026

By J. Navya Sruthi

MUMBAI – Rates on certificates of deposit across most tenures rose Friday due to low liquidity in the banking system which kept participants away from the market, dealers said. Higher CD supply in these tenors also pushed rates up, they added. 

Liquidity in the banking system remained in deficit due to outflows of around INR 1.7 trillion for goods and services tax payments seen earlier this week. "Including cash balances, system liquidity is still in deficit," a dealer at a state-owned bank said. 

Although systemic liquidity turned to a surplus of INR 101.70 billion Thursday, cash balances with the Reserve Bank of India for the day were at INR 7.51 trillion, down INR 145.39 billion from the previous day. The average daily cash reserve requirement for the fortnight ending Jan. 31 was INR 7.64 trillion. Considering the fortnight requirement, liquidity in the system was INR-31.21-billion deficit Thursday.  

On Friday, there was only one CD issuance by Canara Bank in the one-year segment at 7.03% for INR 50 billion. Dealers said the long weekend also kept a few market participants away on Friday. The money markets will be shut Monday on account of Republic Day. Moreover, a handful of banks issued CDs Thursday, which also pushed yields a little higher Friday. Canara Bank, ICICI Bank, Bank of Baroda, HDFC Bank, National Bank for Agriculture and Rural Development, Indian Bank, Export-Import Bank of India, and IndusInd Bank raised over INR 240 billion in CDs maturing in one year Thursday.

Rates on one-year paper were 7.03% Friday, up from 6.95-6.97% Thursday. Rates on six-month CDs rose to 7.10-7.12%, from 7.07% Thursday, while those on three-month CDs remained flat at 7.05-7.10%, dealers said.

Similarly, there was only one commercial paper issuance Friday, significantly lower from Thursday's INR 31.50 billion, dealers said. Bajaj Finance issued CPs worth INR 2 billion maturing in five months at 7.20%. Indicative rates on three-month CPs issued by manufacturing companies were 7.12%, steady from the previous day and those on non-banking financial companies were also unchanged from Thursday at 7.25%. 

Trading volume of CDs in the secondary market was INR 129.75 billion Friday, up from INR 94.75 billion Thursday while that of CPs was at INR 37.72 billion, down from INR 45.58 billion Wednesday.

--Primary market

* Canara Bank raised funds through CDs.

* Bajaj Finance raised funds through CPs. 

--Secondary market

* Standard Chartered Capital's CP maturing Thursday was traded once at a weighted average yield of 5.4993%

* Union Bank of India's CD maturing Tuesday was traded thrice at a weighted average yield of 5.2878%

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 Akul Nishant Akhoury

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