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Informist, Monday, Jun. 8, 2026

 

By Meera Nair

 

MUMBAI – Yields on commercial papers and certificates of deposit fell across most tenures Monday, backed by improving liquidity conditions and strong demand from mutual funds, dealers said.

 

Market participants said yields are likely to remain low in the near term as sufficient fund inflows into mutual funds continue to support demand for short-term debt instruments. 

 

"I expect CD and CP yields to continue softening until September", a dealer at a private-sector bank said. "Yields are still elevated, while mutual funds have ample cash and remain active buyers." The net liquidity absorbed by the RBI--an indication of surplus liquidity--was INR 1.66 trillion Sunday, up from INR 1.59 trillion Saturday, but down from 1.86 trillion Friday, according to the latest release.

 

In the secondary market, yields on AAA-rated three-month CD fell to 7.07-7.09% Monday from 7.10-7.15% Friday, while yields on six-month were down to 7.40-7.42% from 7.55-7.60%, and one-year yields fell to 7.45-7.47%. The three-month segment remained the most actively traded tenor. "Short-term yields are likely to soften further, but longer-tenure yields could face upward pressure due to concerns around El Nino-related inflation and the continuing impact of tensions in West Asia," the dealer quoted above said.

 

Issuances of CDs stood at INR 150.01 billion as of 1837 IST Monday, compared with INR 44.50 billion Friday, according to data from the Clearing Corp of India Ltd. Among major issuers, HDFC Bank raised INR 45.00 billion through 90-day CD at a weighted average yield of 7.14%. Bank of Baroda and Axis Bank raised INR 27.50 billion and INR 19.30 billion, respectively, at weighted average yield of 7.45%. Other key issuers included Indian Bank, Central Bank of India, and IndusInd Bank. 

 

On the CP side, yields on AAA-rated papers issued by non-banking financial companies declined 20 basis points in the three-month and six-month segments, while one-year yields were unchanged. Three-month CP yields eased to 7.55-7.60% from 7.75-7.80% Friday. Six-month yields fell to 7.80-7.85% from 8.00-8.05%, while one-year yields remained steady at 8.05-8.10%.

 

Issuance of CP totalled INR 130.84 billion as of 1850 IST Monday, compared with INR 141.42 billion on Friday. Major issuers included National Bank for Agriculture and Rural Development, Export-Import Bank of India, Titan Co., Birla Group Holdings, and Tata Capital.

 

NABARD raised INR 24.50 billion through 91-day CPs at a weighted average yield of 7.28%, while EXIM Bank raised INR 30.00 billion at 7.15%. Titan Co. borrowed INR 10.00 billion at 7.20%, while Birla Group Holdings and Tata Capital raised INR 5.00 billion each at 8.30% and 7.75%, respectively. Other key CP issuers included HDFC Securities, Motilal Oswal Financial Services, and ICICI Securities. 

 

In the secondary market, CD trading volume fell to INR 79.75 billion from INR 120.45 billion Friday, according to CCIL data. CP trading volume, however, surged to INR 158.00 billion from INR 58.45 billion. "Secondary-market CP volumes have risen sharply as mutual funds received fresh inflows in June and are actively repositioning their portfolios across maturities," a dealer at a brokerage firm said.
 

--Primary market
* HDFC Bank, Canara Bank, Bank of Baroda, Central Bank of India, IndusInd Bank, Indian Bank, The Jammu and Kashmir Bank, and AU Small Finance Bank were among those that raised funds via CDs

* NABARD, EXIM Bank of India, Birla Group Holdings, Tata Capita, Aditya Birla Money, HDFC Securities, Motilal Oswal Financial Services, and ICICI Securities were among those that raised funds via CPs. 

 

--Secondary market

* Canara Bank's CD maturing Tuesday was traded eight times at a weighted average yield of 5.25%
* NABARD's CP maturing Tuesday was traded 15 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
Monday	Friday	Monday	Friday
79.75	120.45	158.00	58.45

   

End

 

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

 

Edited by Deepshikha Bhardwaj

 

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