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Informist, Thursday, Apr. 16, 2026

By Nandini Sinha

MUMBAI – Rates on certificates of deposit and commercial papers ended mostly flat Thursday due to surplus liquidity in the banking system, dealers said. There was neither much demand nor supply for CDs, a dealer from a state-owned bank said.

The net liquidity absorbed by the Reserve Bank of India, a proxy for the liquidity surplus in the banking system, was INR 5.21 trillion Wednesday, up from INR 5.13 trillion Tuesday. After market hours Thursday, the RBI announced that it will hold a seven-day variable rate reverse repo auction for INR 2 trillion Friday. The seven-day variable rate reverse repo auction for INR 2 trillion held on Apr. 10 matures on Friday.

Banks may be issuing CDs despite ample liquidity in the banking system to match their asset-liability management and to extend credit to borrowers, the dealer from the state-owned bank said. CDs maturing in September and March were the most traded, dealers said. "There was not much demand for shorter (term) ones," the dealer said. 

Rates in the short-term debt market could rise by 5-6 basis points due to outflows for goods and services tax payments next week, with the impact lasting for 2-3 days. Thereafter, the rates could return to the current levels, the dealer said.

In the secondary market, rates for three-month CDs were unchanged at 6.10-6.15% Thursday. Rates on one-year CDs were also flat at 6.90-6.95%. However, rates on six-month CDs fell to 6.30-6.40% from 6.45-6.50% Wednesday.

Citibank raised INR 35 billion through CDs maturing on Jun. 24 at 5.85%, while Bank of India raised INR 25 billion through CDs maturing on Jun. 25 at 5.90%. Central Bank of India raised INR 5 billion through CDs maturing on Jul. 1 at 6.15%. 

In the commercial paper market, Grasim Industries raised INR 2.5 billion through papers maturing May 15 at 5.65%. Titan Co. Ltd. raised INR 10 billion through paper maturing Jun. 25 at 6.10%.

Trading volume in the secondary market of CDs was INR 119.75 billion Thursday, marginally down from INR 122.35 billion Wednesday. The traded volume of CPs was INR 36.55 billion Thursday, little changed from INR 35.90 billion Wednesday.

--Primary market

* Citibank, Bank of India, and Central Bank raised funds via CDs

* Grasim Industries, Titan Co., HDB Financial Services raised funds via CPs

--Secondary market

* Indian Bank's CD maturing on Apr. 30 was traded four times at a weighted average yield of 5.5143%

* Bajaj Finance Securities' CP maturing on Apr. 17 was traded thrice at a weighted average yield of 4.9282%

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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