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Informist, Thursday, May 7, 2026

MUMBAI – Rates on three and six-month certificates of deposit ended broadly flat Thursday amid sufficient liquidity in the banking system, dealers said. Mutual funds, the most active participants in the secondary market, bought and sold short-term debt instruments across tenures. However, the concentration of volume was higher in the three-month segment, they said. Trading volumes for certificates of deposit fell Thursday but those for CPs rose sharply.

Banks did not find the Reserve Bank of India's 5.26% cut-off for the four-day variable rate repo auction for INR 750 billion attractive. "TREPS (tri-party repo) was at 5.12% (in the morning). Why would someone borrow at 5.26%?," a dealer at a broking firm asked. 

The three-month AAA-rated CD was unchanged at 6.50-6.60%, while a AAA-rated six-month CD was traded at 6.90-7.00%, down 5 basis points from 6.95-7.05% Wednesday. The rate on a one-year CD was down 15 bps at 7.25-7.30% Thursday from 7.40-7.45% Wednesday.

Three-month CPs issued by non-banking finance companies were unchanged at 6.95-7.05%. Rates on six-month CPs were 7.30-7.40%, up 5 bps from 7.25-7.35% Wednesday, while one-year CPs were also down 5 bps at 7.62-7.65% from 7.67-7.72% Wednesday.

Traded volume for certificates of deposit fell to INR 146.90 billion Thursday from INR 171.95 billion Wednesday while volume for CPs rose sharply to INR 161.55 billion from INR 112.65 billion Wednesday. 

Market participants see liquidity in the banking system being comfortable over the next few days. The net liquidity absorbed by the RBI – an indicator of surplus liquidity in the banking system – was INR 2.65 trillion Wednesday, down from INR 2.80 trillion Tuesday. "RBI's dividend is also going to come, so liquidity is going to be comfortable," a dealer at a private sector bank said. 

There were only two primary issuances of certificates of deposit Thursday, according to data from the Clearing Corp. of India Ltd. IndusInd Bank raised INR 7.5 billion at 6.80% through a three-month CD, while HDFC Bank raised INR 14 billion through two certificates of deposit, both having a weighted average yield of 6.60%.

HDFC Securities Ltd. and Godrej & Boyce Manufacturing Co. Ltd. were among those that issued CPs. HDFC Securities raised INR 5.5 billion at 7.20% through a three-month CP while Godrej and Boyce Manufacturing Co. raised INR 5 billion at 6.88%.

--Primary market
* IndusInd Bank, and HDFC Bank issued certificates of deposit

* HDFC Securities, and Godrej and Boyce Manufacturing Co. were among those that raised funds via CPs

--Secondary market

* Canara Bank's CD maturing Friday was traded 15 times at a weighted average yield of 5.13%
* National Bank for Agriculture and Rural Development's CP maturing Friday was traded 17 times at a weighted average yield of 5.13%

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

Edited by Pankaj Aher

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