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Informist, Tuesday, Apr. 28, 2026

By Nandini Sinha

MUMBAI – Rates on certificates of deposit and commercial papers remained elevated Tuesday due to selling by mutual funds who likely faced redemption pressure, dealers said. CDs and CPs maturing in less than 30 days were traded the most, dealers said. 

"Mutual funds mostly sold 1-month papers. They are booking profits as rates were higher in March and are buying 6-month and 1-year papers," a dealer at a private sector bank said.

Banks which usually invest in mutual funds sell their instruments at the end of the month and buy during the start of the month to manage the capital charge on their securities, a dealer at a private sector bank said. Banks could be issuing CDs for payments of soon-to-be maturing papers. "Banks also tend to roll over their CDs on maturity to raise deposits, which in turn raises their liquidity coverage ratio levels," the dealer said. With geopolitical tensions persisting, banks and corporates could be exerting redemption pressure on mutual funds, the dealer added.

In the secondary market, rates on three-month and six-month CDs were unchanged from Monday at 6.38%-6.43% and 6.88-6.93%, respectively. One-year CDs were dealt in the range of 7.10-7.25% from 7.08-7.18% Monday. Rates on three-month CPs were 6.59-6.60% compared with 6.63-6.68% Monday. Six-month CPs were not traded in the secondary market Tuesday, according to data from the Clearing Corp. of India. One-year CPs were dealt at 7.30-7.40%. 

The volume in the secondary market of CDs were sharply up on Tuesday at INR 101.30 billion from INR 63.25 billion Monday. However, the volume of CPs fell to INR 19.05 billion from INR 34.40 billion Monday. 

Bank of Baroda was the only issuer of CDs in the primary market, according to data from the Clearing Corp. of India. The public sector bank raised a total of INR 19.50 billion through two CDs at 6.32%. Among those who raised funds through CPs in the primary market were HDFC Securities Ltd., which raised INR 2 billion at 6.45%, and Hindustan Petroleum Corp. Ltd., which raised INR 30 billion at 6.10%. Aditya Birla Capital Ltd. raised INR 11.75 billion through at 6.90%. 

--Primary market
* Bank of Baroda raised funds via CDs

* HDFC Securities, Hindustan Petroleum Corp. Ltd., and Aditya Birla Capital raised funds via CPs

--Secondary market

* Axis Bank Ltd.'s CD maturing on Apr. 29 was traded seven times at a weighted average yield of 5.0925%
* Bajaj Finance Ltd.'s CP maturing on Apr. 29 was traded twice at a weighted average yield of 5.1107%

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

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