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Informist, Wednesday, Apr. 22, 2026

By Nandini Sinha
 

MUMBAI – Rates on certificates of deposit and commercial papers rose Wednesday as banking system liquidity tightened due to outflows related to goods and services tax payments and selling by mutual funds, dealers said.

"Trading volumes were concentrated in the 2M (2-month), 3M (3-month) and the 1Y (1-year) segments with mutual funds being the major market participant," LKP Securities Ltd. said in a report. Mutual funds sold the instruments due to redemption pressure, dealers said. The net liquidity absorbed by the Reserve Bank of India, an indicator of the surplus liquidity in the banking system, narrowed to INR 3.28 trillion Tuesday from INR 4.07 trillion Monday.

Some market participants also preferred to park their funds in the treasury bills at the auction Wednesday. The RBI set the cut-off rates for the 91-day T-bill at 5.22%, the 182-day T-bill at 5.47%, and the 364-day T-bill at 5.60%. 

In the secondary market, rates on three-month CDs rose 10 basis points to 6.20-6.25% Wednesday from 6.10-6.15% Tuesday, while those on six-month CDs increased to 6.70-6.75% from 6.40-6.60% Tuesday. Rates on one-year CDs were at 7.00-7.05%, up from 6.80-7.15% Tuesday, dealers said.

Rates on three-month commercial papers were steady at 6.40-6.45% Wednesday, while those on six-month CPs were 6.95-7.00%, up from 6.65-6.70% Tuesday. One-year CPs were dealt at 7.20-7.25% Wednesday.

The volume in the CD secondary market fell to INR 60.75 billion Wednesday from INR 100.40 billion Tuesday. The volume of CPs fell to INR 19.90 billion Wednesday from INR 26.25 billion Tuesday. 

In the primary market, Union Bank of India raised INR 32.75 billion through CDs at 6.1609%, according to data on the Clearing Corp. of India. Axis Securities raised INR 6 billion through CPs maturing on May 21. Hindustan Petroleum Corp., Sikka Ports and Terminals, and Bajaj Auto Credit raised INR 5 billion each through CPs.

--Primary market
* Union Bank of India and IDBI Bank raised funds via CDs

* Axis Securities, Bajaj Financial Securities, Hindustan Petroleum Corp., Sikka Ports and Terminals, and Bajaj Auto Credit raised funds via CPs

--Secondary market

* Axis Bank's CD maturing on Apr. 30 was traded once at a weighted average yield of 5.6009%

* Kotak Securities' CP maturing on May 6 was traded once at a weighted average yield of 5.9988%

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

With inputs from Meera Nair

Edited by Saji George Titus

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