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Informist, Friday, Mar. 6, 2026

By Vaishali Tyagi

MUMBAI – Rates on three-month and one-year certificates of deposit were slightly down Friday due to firm demand from mutual funds and comfortable liquidity in the banking system, dealers said. However, rates on six-month CDs rose as investors stayed away, resulting in bleak demand.

According to latest data, net liquidity absorbed by the Reserve Bank of India from the banking system -- a proxy for the liquidity surplus -- was INR 3.02 trillion Thursday, higher than INR 2.67 trillion Wednesday.

Volume in the secondary market remained on the higher side in both commercial paper and CD markets due to surplus liquidity in the banking system, even though it fell compared to Thursday, dealers said. The trading volume of CDs was INR 142.00 billion, down from INR 171.45 billion on Thursday. The traded volume of CPs rose to INR 92.30 billion, from INR 58.90 billion Thursday. 

In the secondary market, rates on three-month CDs fell marginally to 7.09-7.10% from 7.12-7.15% Thursday, dealers said. However, rates on six-month CDs rose to 7.10-7.13% from 7.05-7.08% the previous day. Rates on one-year CDs were down at 6.93-9.95%. Indicative rates on three-month CPs issued by non-banking finance were broadly unchanged at 7.52-7.63%.

In the primary market, several banks issued CDs aggregating to INR 176.10 billion. The issuers included Punjab National Bank, HDFC Bank, Bank of Baroda, Kotak Mahindra Bank, and Canara Bank. On the CP side, several non-banking financial companies and manufacturing raised total of INR 151.37 billion. Kotak Securities, LIC Housing Finance, Capri Global Capital, IIFL Finance and several others raised funds. 

Dealers said activity in primary market for CDs has increased, driven by banks raising funds for lending and for rolling over instruments. More issuances are expected as the financial year-end approaches. They said issuers are seeing good investor appetite and raising capital to lock in funds at good rates.

--Secondary market

* Bank of Baroda's CD maturing Monday was traded twice at a weighted average yield of 4.9538%

* Titan Co.'s CP maturing Monday was traded twice at a weighted average yield of 4.9538%

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 Ashish Shirke

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