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Informist, Wednesday, Mar. 11, 2026

By Vaishali Tyagi

MUMBAI – Rates on three-month certificates of deposit fell slightly on Wednesday due to firm demand as investors' appetite improved further, dealers said. Rates on CDs of other tenors and commercial papers were steady, they said. "Investor sentiment has improved, but caution is still there," dealers said. "CP-CD rates have fallen slightly as yields in other markets have dropped. However, traders are cautious for now and are avoiding long-term bets."

Mixed investor sentiment is keeping yields within a narrow range across corporate debt tenures. "Yields in longer tenure were also steady, like in NCDs (non-convertible debentures), so was the effect in the short-term debt market also," the dealer quoted above said. 

In the secondary market, rates on three-month CDs fell marginally to 7.10-7.13% Wednesday from 7.15-7.18% Tuesday, while those on six-month CDs were broadly unchanged at 7.19-7.22%. Rates on one-year CDs were steady at 6.98-7.00%, compared with 6.98% Tuesdsday. 

Rates on three-month CPs issued by manufacturing companies were largely steady. Indicative rates on three-month CPs issued by non-banking finance companies were similar to the previous session at 7.54-7.57% Wednesday, while rates on papers issued by manufacturing companies remained steady at 7.24-7.27%, dealers said.

"Mutual funds were seen buying three-month CDs, and most other participants were also seen in this segment because of uncertainty," a dealer at a brokerage said. Traders are buying June maturity instruments, dealers said. Rates on six-month papers remained unchanged due to low demand, while those on one-year CDs remained in the narrow range due to global uncertainty and oversupply, dealers said.

Volume in the secondary market rose Wednesday, dealers said. Market participants attributed significant trading activity in the secondary market to comfortable liquidity in the banking system. According to the latest data, the net liquidity absorbed by the Reserve Bank of India from the banking system was INR 2.74 trillion Tuesday, up from INR 2.19 trillion Monday.

However, some mutual funds faced redemption pressure, which limited the fall in rates. Trading volume in the secondary market of CDs rose to INR 210.00 billion Wednesday from INR 198.90 billion on Tuesday. The traded volume of commercial papers rose to INR 126.40 billion from INR 101.00 billion Tuesday. 

In the primary market, Canara Bank raised funds via CDs and Aditya Birla Money and Bajaj Securities raised funds through CPs, but there was no confirmation from market participants about the quantum and rates.

--Primary market

* Canara Bank raised funds via CDs.

* Aditya Birla Money and Bajaj Securities raised funds via CPs.

--Secondary market

* India Bank's CD maturing Thursday was traded 14 times at a weighted average yield of 4.9830%

* Export-Import Bank of India's CP maturing Thursday was traded 6 times at a weighted average yield of 4.9713%

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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