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Informist, Tuesday, Feb. 10, 2026

By J. Navya Sruthi 

MUMBAI – Rates on one-year certificates of deposit were slightly down Tuesday due to firm demand and comfortable liquidity in the banking system, dealers said. However, rates on three-month CDs rose as investors stayed away from shorter tenures, they said.

Rates on one-year CDs were 6.92-6.95%, down from 7.00-7.05% Monday due to higher demand in the segment, dealers said. Rates on three-month CDs rose to 7.09% from 7.05% Monday. Dealers said demand in the one-year segment is comparatively higher than in the three-month. On six-month CDs, rates were largely steady from the previous day at 7.15-7.20%.

"Why would anyone invest in short-tenure papers when no one knows what happens in April (as news the financial year begins on Apr. 1 and monetary policy is also scheduled in April)? One would prefer the one-year segment and if we see, more issuances are also in the same segment. Also, most mutual funds are investing in one-year segment, as they expect three-month rates to rise further," a dealer at a state-owned bank said. The dealer expects the same trend to continue for rest of the current financial year ending on Mar. 31. "Issuances in three-month segment will also increase, but there will be a minimum of 10 basis points spread between one-year and 3-month," the dealer said.

Rates on commercial papers were largely steady Tuesday from the previous day. Rates on three-month CP issued by non-banking finance companies were largely unchanged at 7.60-7.65% and rates on CPs issued by manufacturing companies were steady at 7.15-7.20%.

Comfortable liquidity in the banking system also kept rates on one-year CDs lower and those on almost all other papers largely steady. According to latest data, the net liquidity absorbed from the banking system by the Reserve Bank of India -- a proxy for the liquidity surplus -- rose to a comfortable level of INR 3.11 trillion Monday from INR 2.97 trillion Sunday. Although inflows from open market operations auction and dollar-rupee buy-sell swap boosted the system's liquidity Friday to the highest level since Aug. 6, outflows of around INR 500 billion for excise duty pushed the liquidity below INR 3 trillion on Sunday. However, systemic liquidity increased on Monday as cash balances with the RBI fell and banks parked more money at the Standing Deposit Facility rate.

Total CD issuances in the primary market were INR 91.75 billion, down from INR 60 billion Monday. Bank of India raised INR 20 billion through a three-month CD at 7.18% and Central Bank of India raised INR 750 million at a similar tenure and rate. Dealers said Bank of India's three-month CD is an outlier and there must be some requirement by the bank. Union Bank of India raised INR 40 billion at 7.09% through a three-month CD and Bank of Baroda raised INR 31 billion at 6.95% through a one-year CD.

In the CP market, total issuances were INR 17.50 billion, down from INR 64.75 billion Monday, dealers said. Aditya Birla Capital issued a three-month CP at 7.60% and raised INR 3.25 billion, HDFC Securities also issued the same tenure CP at 7.70% and raised INR 3.0 billion. Aditya Birla Capital also raised INR 5 billion through one-year CP at 7.52%.

Trading volume in CDs in the secondary market Tuesday was INR 48.05 billion, down from INR 59.50 billion Monday. Trading volume in the CP market was INR 32.35 billion, down from INR 49.60 billion Monday.

--Primary market

* Bank of India, Union Bank of India, Central Bank of India, and Bank of Baroda issued CDs

* Godrej Properties, Kotak Securities, Aditya Birla Capital, HDFC Securities, Hero Fincorp, ICICI Securities, and Aditya Birla Capital raised funds through CPs

--Secondary market

* Bank of India's CD maturing Wednesday was traded thrice at a weighted average yield of 4.6166%

* ICICI Home Finance's CP maturing Wednesday was traded once at a weighted average yield of 5.7679%

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 Ashish Shirke

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