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Informist, Wednesday, Feb. 25, 2026

By J. Navya Sruthi

MUMBAI – Rates on six-month and one-year certificates of deposit fell slightly on Wednesday due to firm demand, dealers said. Rates on three-month CDs and commercial papers were steady, they said.

In the secondary market, rates on one-year CDs fell to 6.85-6.90% from 6.90% on the previous day and those on six months were marginally down at 7.00-7.05% from 7.03-7.05%, dealers said. Rates on three-month CDs were largely steady from the previous day at 7.05-7.10%. Indicative rates on CPs issued by non-banking finance and manufacturing companies were steady from Tuesday at 7.50-7.65% and 7.25-7.30%, respectively, dealers said.

"There is no volume in papers maturing in March as no one wants to keep books that short," a dealer at a state-owned bank said. "Now, most interest is seen in six months and one year, while there is actual pressure in papers up to May maturity," the dealer added. "Most mutual funds are seen participating in one-year CDs (issuances in primary market)," the dealer said. 

Another dealer at another state-owned bank said recovery in systemic liquidity also weighed on rates, which in turn boosted primary issuances of both CP and CD. According to the latest data, the net liquidity absorbed from the banking system by the RBI--a proxy for the liquidity surplus--was INR 2.34 trillion Tuesday, up from INR 1.93 trillion Monday. Dealers attributed the rise in liquidity to inflows of INR 230 billion through coupon and redemptions of state bonds and a decline in cash balances with the RBI.  

The trading volume of CDs in the secondary market Wednesday was INR 132.65 billion, slightly down from INR 139.60 billion Tuesday. The trading volume in the CP market was up at INR 95.35 billion from INR 49.30 billion Tuesday.

In the primary market, the National Bank for Financing Infrastructure and Development Wednesday raised INR 50 billion through a one-year CD at 6.95%. According to market sources, Punjab National Bank issued two one-year CDs at 6.88% and 6.89%. Small Industries Development Bank of India, Indian Overseas Bank, and Canara Bank were also seen issuing CDs in the primary market. However, details on the deals were not available from the market. Details on CPs issued in the primary market were not available Wednesday.

--Primary Market

* NaBFID, SIDBI, Punjab National Bank, and Indian Overseas Bank raised funds through CDs.

--Secondary market

* Canara Bank's CD maturing Thursday was traded thrice at a weighted average yield of 4.9676%

* Export-Import Bank of India's CP maturing Thursday was traded four times at a weighted average yield of 4.9704%

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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