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Informist, Tuesday, Feb. 24, 2026

By J. Navya Sruthi 

MUMBAI – Rates on one-year certificates of deposit fell further on Tuesday due to firm demand, dealers said. Rates on CDs of other tenors and commercial papers were mixed, they said. 

In the secondary market, rates on one-year CDs fell 5 basis points to 6.90% from 6.95% on the previous day, dealers said. Rates on three-month CDs were steady at 7.05%, while those on six-month CDs eased slightly to 7.03-7.05% from 7.05-7.10%, they said. Indicative rates on CPs issued by non-banking finance companies rose 5 bps to 7.50-7.65%, while rates on papers issued by manufacturing companies remained largely steady at 7.25-7.30%, dealers said.

"Mutual funds were seen buying one-year CDs and most other participants were also seen in this segment because of attractive returns," a dealer at a domestic brokerage said. Rates on six-month CDs also fell slightly, tracking those on one-year CDs and government securities, a dealer at a state-owned bank said.

On Tuesday, yields on government bonds fell sharply after cut-off yields at the state bond auction were below expectations, gilt dealers said. Inflows from foreign portfolio investors also supported prices of government securities and weighed on yields. The yield on the 10-year benchmark 6.48%, 2035 gilt fell to 6.68% from 6.70% on the previous day. 

However, rates on three-month CDs and CPs issued by manufacturing companies were largely steady. Dealers said rates on CDs and CPs are expected to fall next week, as mutual funds are expected to buy more once they receive month-end inflows. "Rates may fall by five basis points and remain rangebound from there... we can expect rates rising in the second half of March due to advance tax outflows," a dealer at a private bank said.  

The trading volume of CDs in the secondary market Tuesday was INR 139.60 billion, down from INR 156.10 billion Monday. The trading volume in the CP market was also down at INR 49.30 billion from INR 67 billion Monday.

Rates on one-year CDs in the primary market were also lower by around five basis points, dealers said. HDFC Bank and National Bank for Agriculture and Rural Development issued one-year CDs at 6.95% and 6.99%, respectively. Canara Bank raised INR 35 billion through a three-month CD at 7.01% and Federal Bank raised INR 5 billion through CDs maturing in January 2027 at 7.03%. 

Total CD issuances were INR 160 billion Tuesday, according to Informist data. CP issuances were at INR 77.75 billion on Tuesday. Export-Import Bank of India raised INR 26.5 billion through three-month CP at 7.04% and Aditya Birla Capital raised INR 12 billion through 11-month CP at 7.32%. L&T Finance, Godrej Industries, Axis Securities, Kotak Securities, and HDFC Securities also issued CPs Tuesday, sources said. 

--Primary Market

* Export-Import Bank of India, Aditya Birla Capital, L&T Finance, Godrej Industries, Axis Securities, Kotak Securities, and HDFC Securities raised funds through CPs.  

* HDFC Bank, NABARD, Canara Bank, and Federal Bank raised funds through CDs. 

--Secondary market

* HDFC Bank's CD maturing Wednesday was traded six times at a weighted average yield of 5.0078%

* Cholamandalam Investment and Finance's CP maturing Wednesday was traded once at a weighted average yield of 5.0012%

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 Saji George Titus

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