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Informist, Tuesday, Jan. 27, 2026

 

By J. Navya Sruthi

 

MUMBAI – Rates on three-month certificates of deposit and commercial papers rose Tuesday due to poor participation and higher supply, dealers said. However, rates of other tenures were largely steady from the previous day, they added.  

 

Rates on three-month CDs rose to 7.15-7.20% from 7.05-7.10% Friday, dealers said. Rates on six-month and one-year CDs were largely steady from the previous day at 7.10% and 6.98-7.03% Tuesday. Indicative rates on three-month CPs issued by manufacturing companies were higher from the previous day at 7.35%, and those on non-banking financial companies were also up from Friday at 7.65%. 

 

"Investors are staying away from the three-month segment, while traction is seen in the one-year segment as rates kind of stabilised there," a dealer at a state-owned bank said. The Reserve Bank of India's announcement to hold a 90-day variable rate repo auction also kept rates on six-month and one-year CDs steady from the previous day, the dealer said.

 

The RBI Friday announced several measures to infuse liquidity in the banking system. The central bank will hold the 90-day variable rate repo auction, the longest such operation in recent years, for INR 250 billion on Jan. 30. Besides the variable rate repo, the RBI will also conduct a $10 billion, three-year dollar-rupee buy-sell swap auction on Feb. 4

and open market operations to buy gilts worth INR 1 trillion in two equal tranches on Jan. 29 and Feb. 5. 

 

The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – was INR 569.87 billion Monday, similar to Saturday and Sunday but down from INR 636.49 billion Friday.   

 

Banks raised INR 30.50 billion through CDs on Tuesday. IDBI Bank raised INR 5 billion at 6.73% through CDs maturing in March and INR 12.50 billion at 7.22% through CDs maturing in three months. Axis Bank raised INR 18.00 billion through a three-month CD at 7.15% and IDFC First Bank raised INR 7.50 billion through a one-year CD at 7.25%.

 

Meanwhile, issuances of commercial papers rose to INR 31.25 billion Tuesday from just INR 2 billion on Friday. Bajaj Finance raised INR 12.25 billion through three-month CPs at 7.65% and HDFC Securities raised INR 5.0 billion through three-month CPs at 7.70%. 

 

Trading volume of CDs in the secondary market was INR 121 billion Tuesday, down from INR 129.75 billion Friday, while that of CPs was at INR 43.95 billion, up from INR 37.72 billion Friday

 

 

--Primary market

* IDBI Bank, Axis Bank, and IDFC First Bank raised funds through CDs.

* Bajaj Finance, HDB Finance, Kotak Securities, ICICI Securities, Axis Securities, HDFC Securities, and Poonawala Fincorp raised funds through CPs. 

 

--Secondary market

* Kotak Mahindra Bank's CD, maturing Wednesday, was traded six times at a weighted average yield of 5.2568%

* Small Industries Development Bank of India's CP, maturing Wednesday, was traded once at a weighted average yield of 5.2933%

 

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:

 

Certificates of deposit		Commercial paper
Tuesday	Friday	Tuesday	Friday
121.00	129.75	43.95	37.72

 

End

 

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

 

Edited by Saji George Titus

 

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