More Stories

Informist, Friday, May 15, 2026

 

By Meera Nair

 

MUMBAI – Rates on certificates of deposit rose Friday on easing liquidity surplus in the banking system and weak market sentiment following the hike in retail prices of auto fuels, dealers said. Rates on commercial papers were range-bound due to thin trading activity, dealers said.  

 

Rates on 'AAA'-rated three-month and six-month CDs rose 5 basis points each to 6.95%-7.00% and 7.20%-7.25%, respectively. Rates on one-year CDs rose to 7.38%-7.40% from 7.30%-7.35% Thursday. The rates on 'AAA'-rated three-month CPs issued by non-banking finance companies were steady at 7.60-7.65%.

 

The net liquidity absorbed by the RBI, a proxy for surplus liquidity in the banking system, fell to INR 2.18 trillion Thursday from INR 2.23 trillion Wednesday. The liquidity surplus decreased due to a slight increase in banks' cash balances with the RBI near the end of the reporting fortnight. Market participants fear the liquidity surplus will fall sharply once the goods and services tax outflows begin. 

CDs worth INR 69.10 billion were traded in the secondary market Friday, significantly lower than the INR 121.25 billion Thursday, according to data from the Clearing Corp. of India. Commercial papers worth INR 44.90 billion were traded Friday, up from INR 33.85 billion Thursday. "There was selling pressure from mutual funds and corporates," a dealer from a private-sector bank said. 

 

Bank of Baroda, Canara Bank, and Axis Bank were among the banks that issued CDs Friday, according to data from the Clearing Corp. of India. Bank of Baroda raised INR 25.00 billion through a three-month CD at 6.95%. 

 

National Bank for Agriculture and Rural Development, Bajaj Finance, and Hindustan Petroleum Corp. were among the companies that issued CPs Friday. NABARD raised INR 45.75 billion through a three-month CP at 7.00%, while Bajaj Finance raised INR 14.45 billion through the same-maturity paper at 7.89% .

 

Other than lower liquidity surplus, market participants said the hike in fuel prices by oil marketing companies added to the negative sentiment. Friday, oil marketing companies raised petrol and diesel prices by INR 3 per litre, passing on the burden of high crude oil prices to consumers. 

The fuel hike, the increase in core WPI inflation to 5.0% in April, and the rupee weakening have all affected the short-term market rates this week, a dealer at a domestic brokerage said. "Overall, there is no clarity on what is happening in the market and the sentiment was down today," the dealer said.

 

According to economists at Barclays, the fuel price hike will add around 8 basis points to CPI inflation in May. The full impact of the fuel price hike will only be captured in June CPI data, when Barclays expects these hikes to add 15 bps to headline inflation.

 

"Now the government has asked us to stop spending on gold, petrol, and oil, which means the government itself has stopped spending on a lot of stuff. This can increase the risk of a higher fiscal deficit, which we have to wait and see in the next Budget," the dealer from the brokerage firm said. 

 

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

* NABARD, Bajaj Finance, and ICICI Securities were among those that raised funds via CPs

 

--Secondary market

* Punjab National Bank's CD maturing Monday was traded four times at a weighted average yield of 5.15%
* Manappuram Finance's CP maturing Monday was traded two times at a weighted average yield of 5.30%

 

The 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
Friday	Thursday	Friday	Thursday
69.10	121.25	44.90	33.85

 

End

 

Edited by Saji George Titus

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.