More Stories

Informist, Tuesday, Mar. 17, 2026

By J. Navya Sruthi

MUMBAI – Rates on certificates of deposits and commercial papers fell massively Tuesday due to firm demand on the back of low supply in the market, dealers said. They said mutual funds were buying short-term papers to add to their portfolio to meet specific fund requirements.   

In the secondary market, rates on three-month CDs fell to 7.25-7.30% Tuesday from 7.36-7.40% Monday, while rates on one-year CDs fell to 7.15-7.20% from 7.40% Monday, dealers said. On the commercial paper side, indicative rates for three-month CPs issued by non-banking finance companies fell to 7.30-7.35% from 7.65%.

Most volume was seen in the two-month, three-month, and one-year segments, with mutual funds being the major market participants, a dealer at a domestic brokerage firm said. Trading volume of CDs in the secondary market was INR 136.55 billion Tuesday, up from INR 103.15 billion Monday. Secondary market CPs volume was at INR 83.95 billion, up from INR 52.50 billion on Monday. 

"Yesterday (Monday), there was not so much supply. It was mostly NABARD and HDFC (Bank) in the market all these days. Today (Tuesday) there was firm demand from banks and so rates were down," a dealer at a state-owned bank said. Union Bank, Bank of Baroda, Canara Bank, and Federal Bank were seen issuing CDs in the primary market Tuesday, the dealer said. 

Canara Bank on Tuesday raised INR 19 billion through a CD maturing in September at 7.28%. According to dealers, Union Bank raised around INR 100 billion through a three-month CD at 7.25%. However, the bank did not provide any confirmation about it. 

The liquidity surplus in the banking system fell to INR 754.86 billion Monday, the lowest since Jan. 28. This was because of outflows around INR 1.5 trillion for payments of advance tax for income tax and corporation tax. The Reserve Bank of India conducted a seven-day VRR to support the systemic liquidity. However, the participation at the auction was poor, and the RBI took all bids worth INR 480.14 billion at the auction at 5.26% while the notified amount was INR 1.5 trillion.    

Dealers now expect the RBI to conduct another VRR auction for INR 500 billion or INR 1 trillion ahead of outflows for goods and services tax payments. According to market sources, INR 1.7 trillion to INR 2 trillion of outflows is scheduled for GST payment this week.

--Secondary market

* Punjab National Bank's CD maturing Wednesday was traded six times at a weighted average yield of 5.2672%

* HDFC Securities' CP maturing Apr. 7 was traded once at a weighted average yield of 7.50%

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

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.