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Informist, Wednesday, May 6, 2026

By Nandini Sinha

MUMBAI – High demand from banks and companies boosted traded volumes for certificates of deposit and commercial papers Wednesday but good supply kept rates from rising at the short-end, dealers said. Rates on papers maturing in one year did rise 5 basis points, they added. Certificates of deposit and CPs maturing in one month were the most traded. Traded volume for certificates of deposit rose to INR 171.95 billion from INR 146.20 billion Tuesday while volume for CPs rose to INR 112.65 billion from INR 85.35 billion Tuesday.

"Banks were desperate today. They had rollovers (of CDs)," a dealer at a broking firm said. An improvment in market sentiment after news reports that the US and Iran are getting close to a peace deal on ending the war in west Asia had little effect on CD and CP rates. However, dealers expect issuances of CD and CPs to rise if the positive market sentiment persists. "It depends on the US-Iran deal (to end the war in west Asia), it will definitely impact the issuances," a dealer at a public sector bank said.

In the secondary market, a three-month AAA-rated CD was traded at 6.50-6.60%, up 5 basis points from 6.45-6.55% Tuesday while a AAA-rated six-month CD was traded at 6.95-7.05%, unchanged from Tuesday. The one-year CD was up 5 bps at 7.40-7.45%.

Three-month CPs issued by non-banking finance companies were traded unchanged at 6.95-7.05%. Rates on six-month CPs were 7.25-7.35%, down 5 bps from 7.30-7.40% Tuesday while one-year CPs were up 7 bps at 7.67-7.72% from 7.60-7.65% Tuesday. "Trading volumes were concentrated across segments, with banks and mutual funds being the major market participants," LKP Securities said in a report.

"CP/CDs secondary markets were better today as there was enough liquidity, mainly because mutual funds were on the buying side. The first week of any month this is the trend as there are inflows, and then it gets harder. Also, rates will be lower in the first week of any month," a dealer at a second public sector bank said.

HDFC Bank Ltd., Bank of India, and Karur Vysya Bank Ltd. were among those that issued certificates of deposit Wednesday, according to data from the Clearing Corp. of India Ltd. HDFC Bank raised INR 27.25 billion at 6.60% through a three-month CD while Bank of India raised INR 10 billion for the same tenure at 6.63%. 

Nuvama Clearing Services Ltd., Bajaj Finance Ltd., and HDFC Securities Ltd. were among those that issued CPs. Bajaj Finance raised INR 13.60 billion at 7% through a three-month CP while HDFC Securities raised INR 11.50 billion at 7.20%.

--Primary market
* HDFC Bank, Bank of India were among those that issued CD

* Nuvama Clearing Services, Bajaj Finance Ltd., and HDFC Securities were among those that raised funds via CPs

--Secondary market

* Punjab National Bank's CD maturing Thursday was traded five times at a weighted average yield of 5.11%
* The National Bank for Agriculture and Rural Development's CP maturing Thursday was traded 10 times at a weighted average yield of 5.11%

Following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed by 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 Pankaj Aher

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