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Informist, Monday, Feb. 23, 2026

By J. Navya Sruthi

MUMBAI – Rates on one-year certificates of deposit eased slightly from the previous day, while rates on other tenors in CDs and all tenors in CPs rose slightly due to higher supply, dealers said. Bucking the trend, rates on one-year CDs fell due to firm demand amid attractive rates, they added.

In the secondary market, indicative rates on one-year CDs were down at 6.90-6.95% from 6.95-7.02% Friday. However, rates on six-month CDs rose to 7.05-7.10% from 7.00-7.05% Friday and those on three-month CDs were slightly up at 7.00-7.05%, dealers said. Indicative rates on CPs issued by non-banking finance companies were up 5 bps at 7.50-7.65% and those by manufacturing companies were largely steady at 7.25-7.30%, dealers said.

"It is purely demand and supply in three-month and six-month CDs. There is not enough demand in both of these segments," a dealer at a state-owned bank said. Dealers said that most market participants are seen selling instruments in three-month segment due to year-end pressure.    

"Market is seen selling three-month instruments and switching to one-year segment. For example, Axis Finance three-month CP is around 7.65% (in secondary market) and its January maturity is also around same level. So, why would one prefer three-month segment," a dealer at a domestic brokerage firm said.  

Commenting about liquidity, dealers said liquidity in the banking system was at a comfortable level despite outflows for goods and services tax payments. According to the latest data, the net liquidity absorbed from the banking system by the RBI--a proxy for the liquidity surplus--was at INR 1.74 trillion Sunday, which is at the lowest level since Feb. 2. Systemic liquidity fell from INR 1.82 trillion Saturday and INR 2.27 trillion Friday due to outflows for GST payments.

The trading volume of CDs in the secondary market Monday was INR 156.10 billion, up from INR 107.10 billion Friday. The trading volume in the CP market was also up at INR 67 billion from INR 44.60 billion Friday.

In the primary market, there was hardly any CD issuance, the dealer at the brokerage firm said. "Axis Securities has raised INR 4 billion through one-year CP at 7.47 and Kotak Securities raised INR 9 billion at 7.50% (through one-year CP)," the dealer said. 

--Secondary market

* Bank of baroda's CD maturing Tuesday was traded five times at a weighted average yield of 5.0678%

* Small Industries Development Bank of India's CP maturing Tuesday was traded five times at a weighted average yield of 5.0331%

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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