More Stories

Informist, Wednesday, May 20, 2026

By Meera Nair

MUMBAI – Rates on certificates of deposit and commercial papers were higher Wednesday as liquidity was tighter due to outflows on account of the goods and tax payments and a lower surplus in the banking system, dealers said. "Nearly 30% of GST-related outflows happened today (Wednesday), and we are expecting the remaining to happen tomorrow," a dealer from a private sector bank said. Yields on short-term debt instruments have risen every day this week.

Yields on three-month, six-month, and one-year certificates of deposit were up 10-15 basis points over Tuesday. The three-month 'AAA'-rated CD was traded at 7.30-7.35% Wednesday, up 10 bps from 7.20-7.25% Tuesday, while the six-month CD was traded at 7.50-7.60%, up 10 bps from 7.40-7.45% Tuesday. The one-year CD was traded at 7.80–7.85%, up 15 bps from 7.65–7.70% Tuesday. Yields on certificates of deposit have been rising consistently across maturities and cumulatively yields are now up 30-35 bps over Friday.

"There was more activity in the three-month and six-month segments of CD as investors see one-year as the most volatile," the dealer from the private sector bank said. 

Three-month 'AAA'-rated commercial papers issued by non-banking finance companies traded higher at 7.80-7.85% Wednesday, up slightly from 7.75-7.80% Tuesday. Six-month 'AAA'-rated CPs were traded at 8.00-8.05% Wednesday, up 10 bps from 7.90-7.95% and one-year CPs were traded at 8.10-8.15%, up 10 bps from 8.00-8.20% Tuesday. CP yields are 20 bps higher from Friday.

The net liquidity absorbed by the Reserve Bank of India--an indicator of the surplus liquidity in the banking system--was INR 1.51 trillion Tuesday, down from INR 1.82 trillion Monday. The liquidity surplus fell as banks increased their cash balances with the RBI to INR 8.08 trillion Tuesday from INR 7.88 trillion Monday. 

The RBI conducted a five-day variable rate repo auction for INR 1.5 trillion earlier in the day but got bids for only INR 164.35 billion. The central bank accepted all bids at a cut-off of 5.26%. The availability of cheap funds in the tri-party repo market prompted banks to borrow there in early trade, which took the tri-party repo rate up over RBI repo rate of 5.25% briefly, they said. "RBI might come with another VRR tomorrow as they saw no subscription today," the dealer at the private-sector bank said. 

At 1710 IST, certificates of deposit worth INR 53.90 billion were issued in the primary market Wednesday, up sharply from the INR 32.5 billion issued Tuesday, according to data from the Clearing Corp. of India. Commercial papers worth INR 63.78 billion were issued Wednesday, sharply lower than INR 83.95 billion Tuesday. 

At 1715 IST, certificates of deposit worth INR 70.47 billion were traded Wednesday, sharply lower than the INR 117.20 billion traded Tuesday, according to data from the Clearing Corp. of India. Commercial papers worth INR 38.35 billion were traded Wednesday, up sharply from INR 28.20 billion Tuesday. "Mutual Funds were buying while MFs and banks were on the selling side in the secondary market," the dealer at the private sector bank said.

Bank of Baroda and HDFC Bank Ltd. were among those that issued certificates of deposit Wednesday. Bank of Baroda raised INR 39.40 billion at 7.26% through three-month paper, according to data from the Clearing Corp. of India. Aditya Birla Money Ltd., Godrej Industries Ltd., and Kosamattam Finance Ltd. were among the companies that issued CPs Wednesday. The National Bank for Agriculture and Rural Development raised INR 13.75 billion via an over one-month CP at 7.10%, while Aditya Birla Money raised INR 1 billion through a three-month CP at 8.13% and Godrej Industries raised INR 750 million through a paper of the same maturity at 6.89%.

--Primary market
* Bank of Baroda and HDFC Bank Ltd. were among those that raised funds via CD 

* NABARD, Aditya Birla Money Ltd., Godrej Industries Ltd., and Kosamattam Finance Ltd. were among those that raised funds via CPs

--Secondary market

* Canara Bank's CD maturing Thursday was traded twice at a weighted average yield of 5.90%
* Hindustan Petroleum Corp. Ltd.'s CP maturing Thursday was traded six times at a weighted average yield of 5.18%

The following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed on the Clearing Corp. of India's F-TRAC platform:

End

Edited by Pankaj Aher

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.