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Informist, Thursday, Jun. 4, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit and commercial papers remained steady across most tenures due to a rise in banking system liquidity surplus and ahead of the Reserve Bank of India's Monetary Policy Committee's rate decision Friday, dealers said. "We are eagerly awaiting the (RBI) governor's commentary because there have been several geopolitical developments recently, along with multiple VRR (variable rate repo) and Treasury bill auctions," a dealer at a private-sector bank said. "Market participants will be keen to hear whether the RBI plans additional liquidity measures in the coming months," a dealer at a private-sector bank said.

 

The net liquidity absorbed by the RBI--an indication of surplus liquidity--rose to INR 1.71 trillion on Wednesday from INR 1.12 trillion on Tuesday, according to the latest data. 

 

Yields on AAA-rated three-month, six-month, and one-year CDs were unchanged from Wednesday at 7.20-7.25%, 7.65-7.70%, and 7.80-7.90%, respectively. February- and March-maturity papers were the most actively traded CDs in the secondary market.

 

CD issuances totalled INR 145.50 billion Thursday, sharply higher than INR 49.25 billion Wednesday, according to data from the Clearing Corp of India at 1809 IST. Issuers included AU Small Finance Bank, CSB Bank, Bank of Baroda, Union Bank of India, Punjab National Bank, Bank of India, HDFC Bank, Central Bank of India and Karur Vysya Bank. Union Bank of India raised INR 64.50 billion at a weighted average yield of 7.23% through 91-day CD, while Bank of Baroda raised INR 44.0 billion through same maturity CD at 7.23%, while Punjab National Bank raised INR 8.25 billion through 90-day CD at a weighted average yield of 7.16%. AU Small Finance Bank raised INR 3.50 billion, Bank of India raised INR 9 billion, and HDFC Bank raised INR 6 million. Most of the CDs issued Thursday had a 91-day tenure.

 

On the CP side, yields on three-month AAA-rated papers issued by non-banking financial companies eased, while six-month and one-year yields were steady. Three-month CP yields were at 7.85-7.90%, down 7 basis points from 7.92-7.95% Wednesday. Six-month and one-year CP yields were unchanged at 8.00-8.05% and 8.10-8.20%, respectively. Papers maturing within three months saw the most activity in the secondary market.

 

At 1809 IST, CP issuances rose to INR 173.46 billion Thursday, sharply from INR 91.75 billion Wednesday, according to CCIL data. Key issuers included National Bank for Agriculture and Rural Development, Export-Import Bank of India, ICICI Securities, Bajaj Finance, Motilal Oswal Financial Services, and Tata Capital. Other key issuers included Kotak Securities, Can Fin Homes, PNB Housing Finance, Angel One, IGH Holdings, Network18 Media and Investments, Fedbank Financial Services, and Nuvama Wealth Management.

 

NABARD raised INR 45.50 billion through 91-day CPs at a weighted average yield of 7.40%, while EXIM Bank raised INR 30.00 billion through CPs at a weighted average yield of 7.23%. Motilal Oswal Financial Services and Tata Capital raised INR 9.00 billion each through CPs maturing on Sept. 3.

 

"There was a significant jump in primary market issuance today (Thursday) as borrowers sought to lock in funding rates ahead of the policy decision because banks and corporates generally prefer to complete their borrowing plans before a major policy announcement," the dealer at the brokerage firm said. 

 

In the secondary market, CDs worth INR 134.95 billion were traded Thursday, significantly up from INR 105.25 billion Wednesday, according to CCIL data. Trading volumes of commercial papers also increased to INR 99.65 billion from INR 79.80 billion. "Secondary market volumes picked up ahead of the policy decision as banks, mutual funds, and other investors adjusted liquidity positions and portfolios," the dealer at the same brokerage firm said. "Some investors were also booking profits ahead of the policy outcome, which supported trading activity."

 

--Primary market
* AU Small Finance Bank, CSB Bank, Union Bank of India, Bank of Baroda, Bank of India, Punjab National Bank, HDFC Bank, Central Bank of India, and Karur Vysya Bank raised funds via CDs

* NABARD, Export-Import Bank of India, ICICI Securities, Bajaj Finance, Motilal Oswal Financial Services, and Tata Capital were among those that raised funds via CPs. 

 

--Secondary market

* HDFC Bank Ltd.'s CD maturing Friday was traded 14 times at a weighted average yield of 5.13%
* Export Import Bank of India's CP maturing Friday was traded 11 times at a weighted average yield of 5.14%

 

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
Thursday	Wednesday	Thursday	Wednesday
134.70	105.25	99.65	79.80

   

End

 

 

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

 

 

Edited by Deepshikha Bhardwaj

 

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