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Informist, Friday, Mar. 27, 2026

By Vaishali Tyagi

NEW DELHI – Rates on certificates of deposits maturing in one-year fell marginally due to aggressive buying, while rates on papers maturing in three months rose due to continued selling by mutual funds to meet year-end requirements and amid prevailing uncertainty, dealers said. Market participants expect rates on these instruments to remain range-bound with an upward bias for the rest of the month. Three-month commercial papers were largely steady from the previous day due to low volume in these segments. Money markets were closed on Thursday for Ram Navami.

"Rates in one-year segment rose as people are selling short-term papers of three months to meet their immediate fund requirement due to redemption pressure and uncertainty and buying longer-duration papers," a dealer at a state-owned bank said.

In the secondary market, rates on one-year CDs fell to 7.25% from 7.30-7.40% the previous day, while those on three-month CDs rose to 7.58-7.68% Friday from 7.55-7.65% Wednesday, dealers said. Rates on three-month CPs were largely unchanged from the previous day at 7.70-7.85%, dealers said. 

In primary market of certificates of deposit, HDFC Bank raised INR 51.65 billion through CD maturing on Sept. 21 at 7.57%, according to data available on Clearing Corp. of India F-TRAC platform at 1800 IST. IDBI Bank also raised INR 10 billion and Punjab National Bank borrowed INR 8.75 billion. Other banks include Bandhan Bank, Canara Bank and AU Small Finance Bank. 

On the commercial paper side in the primary market, companies issued a worth of INR 89.35 billion, according to data available on Clearing Corp. of India F-TRAC platform. Out of the total amount, Export-Import Bank of India raised INR 18 billion, while the National Bank for Agriculture and Rural Development raised INR 7.25 billion through CP maturing on Apr. 24 at 7.5006% and 7.50%, respectively. Other CP issuers include Axis Finance, ICICI Securities, Capri Global and HDFC Securities. 

Selling during these days is a cyclical trend and investors sell corporate debt instruments like CDs, CPs, and bonds ahead of year-end to meet redemption pressure, dealers said. As per the latest data by the RBI, liquidity surplus in the banking system was INR 487.00 billion Thursday, slightly up from INR 432.17 billion Wednesday. 

"Impact from rise in government bonds and long-tenure corporate bonds yield has been limited on short-term debt market," the dealer quoted above said, adding that the short-term debt market is more driven by demand and supply dynamics these days. "Whatever selling is happening is due to redemption pressure, other players are absorbing it."

Further, dealers said that the impact is there and will likely mirror the movement in government securities, but the movement in yields may not be to the same scale... it will be more pronounced in some segments and less in others.

Trading volume in the secondary market of CDs was INR 101.75 billion Friday, compared to INR 102.60 billion Wednesday. The traded volume of CPs marginally fell to INR 43.50 billion from INR 47.25 billion Wednesday.

--Primary market

* HDFC Bank, Bandhan Bank, Punjab National Bank, IDBI Bank, Canara Bank and AU Small Finance Bank aised funds via CDs.

* EXIM Bank, NABARD, ICICI Securities, Capri Global and HDFC Securities raised funds via CPs.

--Secondary market

* Indian Overseas Bank's CD maturing Monday was traded twice at a weighted average yield of 5.7454%

* Larsen and Toubro's CP maturing Monday was traded thrice at a weighted average yield of 5.6358%

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

Edited by Deepshikha Bhardwaj

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