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Informist, Wednesday, Jun. 3, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit and commercial papers remained steady across most tenures Wednesday due to comfortable liquidity in the banking system, dealers said. Balanced demand and supply dynamics also kept short-term yields steady, they said. However, yields on one-year commercial paper rose by 5-10 basis points.

 

"Rates usually cool in the first week of every month, and yields tend to remain range-bound or flat during this period," a dealer at a private-sector bank said.

 

The net liquidity absorbed by the Reserve Bank of India, an indicator of surplus liquidity in the banking system, rose to INR 1.12 trillion Tuesday from INR 854 billion Monday, according to the latest data. Dealers said banks remained comfortable with prevailing liquidity conditions and maintained around INR 800 billion in excess cash reserve balances with the RBI. 
 

Yields on AAA-rated three-month, six-month, and one-year CDs were unchanged from Tuesday at 7.20-7.25%, 7.65-7.70%, and 7.80-7.90%, respectively. Three-month and nine-month segments were the most actively traded CDs in the secondary market.

 

On Wednesday, CD issuances totalled INR 49.25 billion, up from INR 30.00 billion on Tuesday, according to data from the Clearing Corp of India. Issuers included Punjab National Bank, UCO Bank, IndusInd Bank, Federal Bank, Bank of India, and Jammu and Kashmir Bank. Punjab and National Bank raised INR 29.50 billion through a 29-day CP at a weighted average yield of 6.60%, while IndusInd Bank raised INR 5.00 billion through a 90-day CP at a weighted average yield of 7.55%. UCO Bank raised INR 3.25 billion and Federal Bank borrowed INR 4.50 billion. 

 

On the CP side, three-month and six-month CPs were steady at 7.92-7.95% and 8.00-8.05%, respectively. Rates on one-year papers rose 5-10 bps to 8.10-8.20% from 8.05-8.10% Tuesday. Segments up to three months were active on the secondary market. 

 

CP issuances rose significantly to INR 91.75 billion Wednesday from INR 40.39 billion Tuesday, according to CCIL data. SBICAP Securities, Axis Finance, Bajaj Finance, ICICI Securities, Kotak Securities, Interise Trust, Reliance Retail Ventures, Sharekhan, HDFC Securities, and Network18 Media and Investments were among the key issuers. Interise Trust raised INR 17.27 billion through a three-month CP at a weighted average yield of 7.80%, while Reliance Retail Ventures raised INR 12.50 billion through CPs at a weighted average yield of 7.32%. Bajaj Finance borrowed INR 21.25 billion through CP maturing on Jul. 3. 

 

In the secondary market, CDs worth INR 105.25 billion were traded as of 1700 IST, sharply lower from INR 167.85 billion Tuesday, according to CCIL data. CP volumes rose to INR 79.80 billion from INR 66.60 billion. "In the CD secondary market, volumes were low today (Wednesday) compared to yesterday (Tuesday) as participants are focusing on super short tenors like one or two days' CDs instead of one-month or two-month papers... that has been the trend lately," a dealer at another private bank said. "But now, that banks have better liquidity... market is improving and mutual funds are deploying cash again across segments."

 

--Primary market
* Punjab National Bank, UCO Bank, IndusInd Bank, Federal Bank, Jammu and Kashmir Bank, and Bank of India raised funds via CDs

* SBICAP Securities, Axis Finance, ICICI Securities, Kotak Securities, Interise Trust, Reliance Retail Ventures, Sharekhan, HDFC Securities, and Network18 Media and Investments raised funds via CPs. 

 

--Secondary market

* HDFC Bank's CD maturing Thursday was traded nine times at a weighted average yield of 5.22%
* ICICI Securities' CP maturing Thursday was traded eight times at a weighted average yield of 5.25%

 

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
Wednesday	Tuesday	Wednesday	Tuesday
105.25	167.85	79.80	66.60

 

End

 

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

 

Edited by Saji George Titus

 

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