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Informist, Wednesday, Jan. 28, 2026

 

By J. Navya Sruthi

 

MUMBAI – Rates on certificates of deposit and commercial papers rose for the second consecutive day due to high issuances in the primary market, which added to the existing supply, dealers said. They added that rates are likely to remain at this level.  

 

Rates on three-month CDs were higher at 7.15-7.20% Wednesday from 7.15-7.18% Tuesday, dealers said. Rates on six-month CDs were significantly up at 7.20-7.25% from 7.10% the previous day. Rates on one-year CDs were also higher at 7.10% from 6.98% the previous day.

 

In fact, the Small Industries Development Bank of India issued a one-year CD worth INR 70 billion at 7.25%, which was 5 basis points higher than the rate on the INR-75-billion one-year CD issued a week ago. Apart from the Small Industries Development Bank of India, Canara Bank and Export-Import Bank of India also issued one-year CDs Wednesday. Union Bank issued a three-month CD worth INR 50 billion at 7.19%. 

 

Meanwhile, rates on three-month CPs issued by non-banking financial companies were up at 7.75% from 7.65% Tuesday, while indicative rates on manufacturing companies were largely steady from the previous day at 7.35%. Bajaj Finance and Aditya Birla Capital issued three-month CPs at 7.75?ch. 

 

Trading volume of CDs in the secondary market was INR 189.60 billion Wednesday, significantly higher than INR 121 billion Tuesday, while that of CPs was INR 53.43 billion, up from INR 43.95 billion Tuesday. 

 

The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – was INR 836.87 billion Tuesday, up from INR 569.87 billion Monday. "Although liquidity improved, it is still below the 1 lakh crore (INR 1 trillion) and there was also state bond auction outflows today (Wednesday). Government spending will start only Friday or so," a dealer at a state-owned bank said. 

 

--Primary market

* Union Bank, Canara Bank, Export-Import Bank of India, and Small Industries Development Bank of India raised funds through CDs.

* Bajaj Finance, Axis Securities, Aditya Birla Capital, and Aditya Birla Housing Finance raised funds through CPs. 

 

--Secondary market

* Punjab National Bank's CD, maturing Thursday, was traded four times at a weighted average yield of 5.1846%

* L&T Finance's CP, maturing Thursday, was traded thrice at a weighted average yield of 5.1505%

 

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
Wednesday	Tuesday	Wednesday	Tuesday
189.60	121.00	53.43	43.95

 

End

 

Edited by Tanima Banerjee

 

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