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Informist, Monday, May 18, 2026

By Meera Nair

MUMBAI – Rates on certificates of deposit and commercial papers rose sharply Monday as liquidity surplus in the banking system fell, dealers said. 

The three-month 'AAA'-rated CDs were traded at 7.05-7.15% Monday, up by 10 basis points from 6.95-7.00% Friday in the secondary market, while 'AAA'-rated six-month CDs were traded at 7.25-7.35%, slightly up from 7.20%-7.25% Friday. The rate on one-year CDs was significantly up at 7.50-7.60% from 7.38-7.40% Friday. 

The net liquidity absorbed by the RBI--an indicator of surplus liquidity in the banking system--was INR 1.42 trillion Sunday, down from INR 1.99 trillion Saturday, the lowest since March. Liquidity fell Sunday as banks increased their cash balances with the RBI during the beginning of the fortnight. Cash balances with the RBI as of Sunday were INR 8.67 trillion, higher than the average daily requirement of INR 7.97 trillion for the fortnight ended May 31.   

The net liquidity in the banking system was lower from the previous day and also a week ago due to excise duty outflows seen during the week ended Sunday. 

CDs worth INR 97.90 billion were traded in the secondary market Monday, significantly higher than INR 69.10 billion Friday, according to data from the Clearing Corp. of India. Commercial papers worth INR 45.80 billion were traded, slightly up from INR 44.90 billion Friday. "Public-sector banks were on the selling side today," a dealer at a private sector bank said. 

"People are actually clueless as in what is happening in the market, they are not understanding where the rates and volatility is taking to. It seems like this can be seen for this week...," the dealer at the private sector bank said. 

Indian Bank, Punjab and Sind Bank, and DCB Bank were among the banks that issued CDs Monday, according to data from the Clearing Corp. of India. Indian Bank raised INR 10.00 billion through an over one-month CD at 6.95%. 

L&T Metro Rail Hyderabad Ltd., Cholamandalam Investment and Finance Co. Ltd., and Tata Capital Ltd. were among the companies that issued CPs Monday. L&T Metro Rail Hyderabad raised INR 10.68 billion through an over one-month CP at 7.05%, while Cholamandalam Investment and Finance raised INR 3.75 billion through the two-month CP at 7.79%.

--Primary market
* Indian Bank, Punjab and Sind Bank, and DCB Bank Ltd. were among those that issued CDs

* L&T Metro Rail Hyderabad Ltd., Cholamandalam Investment and Finance Co. Ltd., and Aditya Birla Money Ltd. were among those that raised funds via CPs

--Secondary market

* HDFC Bank Ltd.'s CD maturing Tuesday was traded 12 times at a weighted average yield of 5.15%
* Jamnagar Utilities Power Pvt. Ltd. CP maturing Tuesday was traded five times at a weighted average yield of 5.15%

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:

End

Edited by Akul Nishant Akhoury

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