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Informist, Monday, Apr. 27, 2026

By Nandini Sinha

MUMBAI – Rates on certificates of deposit and commercial papers rose by about 3 basis points Monday amid demand for funds and selling by mutual funds, dealers said. CDs and CPs maturing in less than 30 days were the most traded, they said. 

The net liquidity absorbed by the Reserve Bank of India, a proxy for surplus liquidity in the banking system, was INR 2.92 trillion Sunday. Overall liquidity in the system is considered comfortable by market participants, dealers said. 

"The liquidity levels are low from early April. They (market participants) could be selling papers that are in a profitable position to increase their liquidity," a dealer at a private sector bank said.

In the secondary market, rates on three-month CDs rose 3 basis points to 6.38%-6.43% from 6.35-6.40% Friday. Six-month CDs rose 3 bps from Friday to 6.88-6.93%. Rates on one-year CDs also rose by 3 bps to 7.08-7.18%, dealers said. Rates on three- and six-month CPs rose 3 bps each to 6.63-6.68% and 7.18-7.23%, respectively. One-year CPs were traded in the range of 7.59-7.65%. 

The volume in the secondary market of CDs fell sharply to INR 63.25 billion Monday from INR 104.15 billion Friday. The volume of CPs fell to INR 34.40 billion from INR 36.05 billion Friday. "Volumes were down because no one wants to trade at such (elevated) rates," a dealer at a second private sector bank said. 

"There is not much demand for CDs and CPs right now. In four days' time, government spending is going to rise. Whatever borrowing needs are there are happening on an overnight basis," the dealer quoted in the first instance said. 

In the primary market, Union Bank of India and ICICI Bank issued CDs, according to data from the Clearing Corp. of India. Union Bank of India raised INR 5 billion at 6.1999%, while ICICI Bank raised INR 17 billion through CD at 7.00%. 

Banks could be issuing CDs for their asset and liability management books, or for redeeming CDs that are maturing, the dealer at the second private sector bank said. 

Among those who raised funds through CPs in the primary market were HDB Financial Services, which raised INR 3 billion at 6.14% and Aditya Birla Capital, which raised INR 2.75 billion at 6.75%. ICICI Securities and Axis Securities raised INR 5 billion each through CPs at 7.49% and 7.00%, respectively.

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

* HDB Financial Services, Aditya Birla Capital, ICICI Securities, and Axis Securities raised funds via CPs

--Secondary market

* HDFC Securities' CP maturing on Apr. 29 was traded twice at a weighted average yield of 5.7506%

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

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