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Informist, Thursday, Feb. 12, 2026

 

By Vaishali Tyagi

 

NEW DELHI – Rates on six-month and one-year certificates of deposit fell slightly Thursday due to continuous strong demand and ample liquidity in the banking system, dealers said. Surplus funds with mutual funds, which are major investors in short-term debt paper, kept the market active, traders said.

 

"In CP-CD, everyone was active, people were investing in primary and good activity was seen in the secondary market also, I think it is due to good liquidity with investors... We saw high activity from mutual funds and banks also," a dealer at a brokerage firm said. 

 

Rates on one-year CDs were 6.85-6.88%, down from 6.90-6.93% Wednesday, owing to higher demand from investors, dealers said. Rates on six-month CDs fell to 6.95-7.02% from 7.04-7.05% Wednesday. Rates on three-month CDs remained unchanged at 7.05-7.10% from the previous day.

 

Liquidity in the banking system, which rose to a six-month high on Friday and has remained in hefty surplus since. According to the latest data, the net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – fell to INR 2.86 trillion Wednesday from INR 3.37 trillion Tuesday. Banks parked around INR 500 billion less funds in the SDF window Wednesday, at INR 4.23 trillion. Dealers say banks are focusing on the one-year segment, causing rates in that segment to fluctuate. Meanwhile, there is limited interest in the three-month segment.

 

Rates on commercial paper edged down 1-2 bps as heavy supply met investor demand. Dealers said non-banking financial companies issued decent volumes, drawing investor interest. Most CP issuances targeted the three-month and one-year segments, skipping the six-month tenor. Rates on three-month CP issued by non-banking finance companies fell to 7.52-7.58% from 7.55-7.60% Wednesday. Rates on similar-maturity CPs issued by manufacturing companies were broadly unchanged at 7.14-7.20% from the previous session.

 

The trading volume in CD in the secondary market Thursday was INR 150.90 billion, significantly up from INR 69.25 billion Wednesday. The trading volume in the CP market was INR 67.35 billion, also up from INR 55.35 billion Wednesday. Dealers said the higher trading volume in the secondary market was due to the ample liquidity in the system.

--Primary market

* Kotak Mahindra Bank and Canara Bank raised funds through CDs

* NABARD, Kotak Securities, ICICI Securities, Poonawala Fincorp, Bajaj Securities, HDFC Securities, Birla Group, Motilal Oswal Financial Services, Cholamandalam Investment and Finance Co., and Export-Import Bank raised funds through CPs

 

--Secondary market

* Export-Import Bank of India's CP maturing Friday was traded thrice at a weighted average yield of 4.8551%

*Punjab National Bank's CD maturing Friday was traded eight times at a weighted average yield of 4.8557%

 

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
Thursday	Wednesday	Thursday	Wednesday
150.90	69.25	67.35	55.35

 

End

 

Edited by Saji George Titus

 

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