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Informist, Wednesday, May 13, 2026

 

By Meera Nair

 

MUMBAI – Rates on certificates of deposit and commercial papers were up Wednesday due to selling by mutual funds amid redemption pressure, dealers said. Market participants expect secondary market volumes of both CPs and CDs to fall in the coming days. 

 

Dealers said tight liquidity in the banking system also pushed the short-term debt market rates higher. The net liquidity absorbed by the RBI--an indicator of surplus liquidity in the banking system--was INR 2.28 trillion Tuesday, up from INR 1.94 trillion Monday. The liquidity surplus increased as banks' cash balances with the RBI fell to INR 7.63 trillion Tuesday from INR 7.93 trillion Monday. 

 

As of 1722 IST, CDs worth INR 86.17 billion were traded in the secondary market, according to data from the Clearing Corp. of India. This was lower than INR 94.40 billion worth of CDs issued Tuesday. CPs worth INR 51.50 billion were traded Wednesday, slightly down from INR 59.25 billion worth of CPs issued Tuesday. 

 

The three-month 'AAA'-rated CDs were traded at 6.70-6.80% Wednesday, up 5 basis points from 6.65-6.70% Tuesday in the secondary market, while 'AAA'-rated six-month CDs were traded at 7.05-7.10%, up 5 bps from 7.00-7.05% Tuesday. The rate on one-year CDs was up at 7.40-7.45% from 7.35-7.45% Tuesday. "From April till today, out of the INR 1.5 trillion maturity in the CD market, only INR 32 billion worth of maturity has been rolled over," a dealer at a private-sector bank said, expecting the CD issuances to rise. 

 

Three-month CPs issued by 'AAA'-rated public sector banks were traded at 7.35-7.40%, significantly up from 6.75-6.80% Tuesday, while six-month CPs traded at 7.40-7.45%, 30 bps higher than 7.10-7.15% Tuesday, and one-year CPs were traded at 7.70-7.75% levels, up from 7.35% levels Tuesday. "There was too much supply in the market, which has made the CP rates elevated to this level from yesterday (Tuesday)," a dealer from a public sector bank said. 

 

Canara Bank, Bank of Baroda, and Karur Vysya Bank, were among those that issued CDs Wednesday, according to data from the Clearing Corp. of India. Canara Bank raised INR 5.5 billion at 6.70% through a three-month CD. 

 

360 ONE WAM Ltd., Kotak Securities Ltd., and ICICI Securities Ltd. were among those that issued CPs Wednesday. 360 ONE WAM raised INR 70.00 billion at 8.00% through a three-month CP, while Kotak Securities raised INR 62.5 billion at 7.55% through a three-month CP.

 

--Primary market
* Canara Bank, Bank of Baroda, and Punjab and Sind Bank, were among those that issued CDs

* 360 ONE WAM, Kotak Securities, and Axis Securities were among those that raised funds via CPs

 

--Secondary market

* IndusInd Bank's CD maturing Thursday was traded four times at a weighted average yield of 5.17%
* Bharti Telecom's CP maturing Thursday was traded six times at a weighted average yield of 5.17%

 

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
Wednesday	Tuesday	Wednesday	Tuesday
86.17	94.40	51.50	59.25

 

End

 

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

 

Edited by Tanima Banerjee

 

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