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Informist, Monday, Mar. 2, 2026

 

By Vaishali Tyagi

 

NEW DELHI – Rates on certificates of deposit and commercial papers were steady Monday because of low volume in the secondary market as participants only entered into need-based deals ahead of the holiday Tuesday for Holi, dealers said. The trading volume of CDs was INR 100.95 billion, down from INR 108.20 billion Thursday. The trading volume of CPs was INR 23.60 billion, down from INR 34.20 billion Friday.

 

At the start of trading hours, rates fell slightly because of ample liquidity in the system, but as the day progressed, rates rose to the previous day's levels as domestic equity indices fell. The benchmark share indices ended sharply lower Monday as rising hostilities in West Asia led to a sharp rise in crude oil prices. Investors across the globe adopted a 'risk-off' approach, selling equities and purchasing safe haven assets such as gold and the US dollar. Though investors sold across sectors, shares of travel and logistics companies were hit especially hard, but mining and defence companies gained.

 

"CD rates fell slightly due to ample liquidity, while a few mutual funds sold May-maturing CDs amid redemption pressure, which pushed rates little higher in that segment," a dealer at a brokerage firm said. So far there is no impact of the West Asia conflict on the short-term debt market, dealers said. "No major impact was seen yet, but the situation may affect rates on Wednesday," the dealer said.

 

According to latest data, net liquidity absorbed from the banking system by the Reserve Bank of India -- a proxy for the liquidity surplus -- was INR 2.13 trillion Sunday, down from INR 2.84 trillion Saturday.

 

In the secondary market, rates on three-month CDs were 7.05-7.10%, unchanged from the previous day, dealers said. Rates on six-month and one-year papers were largely steady from the previous day at 7.0-7.05% and 6.92%, respectively. Indicative rates on CPs issued by non-banking finance and manufacturing companies were also steady at 7.50-7.65% and 7.25-7.30%, respectively, dealers said.

 

In the primary market, Punjab National Bank raised INR 27 billion through CD maturing on Apr. 2. The bank raised the funds at 6.98%. Bank of Baroda also raised funds through one-month CD, but there was no confirmation about the quantum and rate. Canara Bank and Indian Bank were also looking to raise funds but they did not because of low participation in the market, dealers said.

 

--Primary Market

* Punjab National Bank and Bank of Baroda raised funds through CDs.

 

--Secondary market

* Axis Bank's CD maturing Wednesday was traded six times at a weighted average yield of 5.0332%

* ICICI Securities' CP maturing Wednesday was traded twice at a weighted average yield of 5.0567%

 

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
Monday	Friday	Monday	Friday
100.95	108.20	23.60	34.20

 

End

 

Edited by Ashish Shirke

 

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