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Informist, Monday, May 25, 2026

 

By Meera Nair

 

MUMBAI – Rates on short-term debt instruments rose Monday due to low surplus liquidity in the banking system and higher supply of papers, dealers said.

 

Sunday, the RBI's net liquidity absorbed, which is an indication of the surplus liquidity, was INR 552.86 billion, up from INR 518.21 billion Saturday, and INR 549.77 billion Friday. Liquidity declined majorly due to outflows for goods and services tax payments last week. 

 

Yields on three-month 'AAA'-rated CD were traded at 7.62-7.67% Monday, up 22 basis points from 7.40-7.45% Friday, while six-month CD were traded at 7.80-7.90%, up 10 bps 7.70-7.75 Friday. Rates on one-year CD were at 7.85-7.95%, up 5 bps from 7.80–7.85%.

 

Three-month 'AAA'-rated commercial paper issued by non-banking finance companies were traded at 7.95-8.00%, up 10 bps from 7.85-7.90% Friday. Similarly, rated six-month CP were unchanged from Friday at 8.10-8.15%. One-year CP were traded at 8.20-8.25%, up 5 bps from 8.15-8.20%. "Three-month was the most active segments in CPs and CD today (Monday)," a dealer at a private-sector bank said. 

 

"The yields of CPs and CDs rose from the previous day as the market sentiment continues to be negative... but as the (Brent) crude oil prices fell today hoping the Strait of Hormuz will reopen, the market should get better in the coming days," a dealer at a brokerage firm said. 

 

In the secondary market, at 1701 IST, volume of certificates of deposit worth INR 133.90 billion were traded Monday, sharply higher than the INR 120.95 billion traded Friday, according to data from the Clearing Corp. of India. Commercial papers worth INR 46.55 billion were traded Monday, up from INR 44.04 billion Friday. Mutual funds and corporates were buyers in the secondary market, though a handful of MFs were present on the selling side also. 

 

Union Bank of India, Bank of Baroda, and HDFC Bank were among those that issued certificates of deposit Monday. Bank of Baroda raised INR 49.15 billion and HDFC Bank raised INR 63.50 billion through two CDs each, CCIL data showed. As of 1821 IST, certificates of deposit worth INR 169.05 billion were issued Monday, up sharply from INR 91.95 billion Friday, according to the data.

 

IIFL Finance, HDFC Securities, Kotak Securities, ICICI Securities, and Tata Capital were among the companies that issued CPs Monday. HDFC Securites raised INR 32 billion through a two CPs of different maturites, while Tata Capital raised INR 2.5 billion through 3-month CP at 7.55%. At 1832 IST, total volume of issuances was INR 36.10 billion according to the data on CCIL.

 

--Primary market
* Union Bank of India, bank of Baroda, and HDFC Bank Ltd. were among those that raised funds via CDs 

* IIFL Finance, HDFC Securities, Kotak Securities, ICICI Securities, and Tata Capital raised funds via CPs

 

--Secondary market

* Union Bank of India's CD maturing Tuesday was traded five times at a weighted average yield of 5.31%
* Aditya Birla Capital Ltd.'s CP maturing Tuesday was traded four times at a weighted average yield of 5.34%

 

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

 

Certificates of deposit		Commercial paper
Monday	Friday	Monday	Friday
133.90	120.95	46.55	44.04

 

 

End

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

 

Edited by Deepshikha Bhardwaj

 

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