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Informist, Tuesday, May 12, 2026

 

By Meera Nair

 

MUMBAI – Rates on certificates of deposit rose Tuesday, driven by goods and service tax-related outflows and higher loan demand, dealers said. CD volumes in the secondary market also jumped due to demand for funds.

 

As of 1824 IST, CDs worth INR 94.40 billion were traded in the secondary market, according to data from the Clearing Corp. of India. This was lower than INR 53.75 billion worth of CDs issued Monday. Commercial papers worth INR 59.25 billion were traded Tuesday, down from INR 75.93 billion worth of CPs issued Monday. 

 

The three-month 'AAA'-rated CDs were traded at 6.65-6.70% Tuesday, up 5 basis points from 6.60-6.65% Monday in the secondary market, while 'AAA'-rated six-month CDs was traded at 7.00-7.05%, up 20 bps from 6.80-6.85% Monday. The indicative rate on a one-year CD was sharply up at 7.35-7.45% levels from 7.25% Monday. "Trading volumes were mostly seen in over six-month segment, with small banks and mutual funds as major market participants," a dealer from the private-sector bank said. 

"Currently, there is a maturity of INR 1.5 trillion in the CD market, so can expect a rollover in the end of May or start of June," a dealer at another private-sector bank said, expecting the CD issuances to rise. CDs worth INR 186.55 billion are due to mature during the rest of this week.

 

'AAA'-rated CPs were traded 10 basis points higher in three-month, six-month, and one-year segments. Rates on three-month CPs were 6.75-6.80%, while six-month CPs traded at 7.10-7.15% and one-year were dealt at 7.35% levels. "OMCs (oil marketing companies) might wait for government confirmation about the (petrol and diesel) rates. There are chances that they will cancel or postpone the issuances," another dealer from a private sector bank said. 

 

Bank of Baroda, IDFC FIRST Bank, and Karur Vysya Bank, were among those that issued CDs Tuesday, according to data from the Clearing Corp. of India. Bank of Baroda raised INR 12.00 billion at 6.60% through a three-month CD. 

 

Bajaj Finance Ltd., Tata Steel Ltd., and HDFC Securities Ltd. were among those that issued CPs Tuesday. Bajaj Finance raised INR 10.25 billion at 7.20% through a one-month CP, while Tata Steel raised INR 6.50 billion at 6.40% through a three-month CP.

 

--Primary market
* Bank of Baroda, IDFC FIRST Bank, City Union Bank, were among those that issued CDs

* Knowledge Realty Trust, Bajaj Finance, National Bank for Agriculture and Rural Development were among those that raised funds via CPs

 

--Secondary market

* Bank of India's CD maturing Wednesday was traded eight times at a weighted average yield of 5.26%
* Bharat Petroleum Corp. Ltd.'s CP maturing Wednesday was traded four times at a weighted average yield of 5.19%

 

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:

 

Certificates of deposit		Commercial paper
Tuesday	Monday	Tuesday	Monday
94.40	57.65	59.25	75.93

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Tanima Banerjee

 

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