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Informist, Wednesday, Jun. 10, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit softened by five basis points while those on commercial papers were range-bound across tenures Wednesday, dealers said. This was mainly due to comfortable liquidity surplus in the banking system, dealers said.

 

The net liquidity absorbed by the RBI was INR 1.47 trillion Tuesday, up from INR 1.34 trillion Monday, according to the latest release. "Liquidity remains comfortable as of now and this (liquidity) will continue to be up till the advance tax outflow scheduled on Jun. 15," a dealer at a brokerage firm said.

 

"The FCNR(B) (foreign currency non-resident) measures are giving more room to CP, CD yields to soften, and it could get finer by 20 bps by September as the measures are expected to add durable liquidity to the banking sytem in the three-five-year deposits," a dealer at a private-sector bank said. 

 

In the secondary market, yields on AAA-rated CD fell across tenures by 5 bps. The AAA-rated three-month CD fell to 6.85-6.90% Wednesday from 6.90-6.95% Tuesday. Six-month yields eased to 7.20-7.25% from 7.25-7.30%, while one-year yields declined to 7.30-7.35% from 7.35-7.40%. The three-month and nine-month segments were most traded Wednesday.

 

"The foreign inflows can pull (down) three-month CD yields by 20-30 bps from the current 6.90% levels... similar measures introduced by the RBI in 2013 had also led to a sharp decline in short-term money market rates, and a comparable trend can happen this time too... but the magnitude of decline in yields may not be as large as it was in 2013," the dealer at the private-sector bank said.  

 

CD issuance stood at INR 176.60 billion as of 1812 IST, sharply higher than INR 66.65 billion Tuesday, according to data from the Clearing Corp of India Ltd. HDFC Bank, City Union Bank, Central Bank of India, IDFC FIRST Bank, The Federal Bank, and Bank of Baroda were the major issuers in the CD primary market.

 

Among these major issuers, HDFC Bank raised INR 65.10 billion through 91-day CD at a weighted average yield of 6.90%. Central Bank of India and IDFC FIRST Bank raised INR 10.00 billion each through three-month CD at a weighted average yield of 6.96% and 7.00%, respectively. 

 

On the CPs side, yields on AAA-rated papers issued by non-banking financial companies were rangebound in the three-month, six-month and one-year segments at 7.40-7.45%, 7.55-7.60%, and 7.75-7.80%, respectively. "There was no major activity happened in the CP market today (Wednesday)...till yesterday activity worth INR 30-40 crore (INR 300 million to INR 400 million) happened and looks like mutual funds are done trading in the secondary market," the dealer at the brokerage firm mentioned above said. 

 

Issuance of CPs fell to INR 240.87 billion as of 1708 IST Wednesday, compared with INR 245.68 billion Tuesday. Major issuers included Export Import Bank of India, National Bank for Agriculture and Rural Development, L&T Ltd., Bharat Petroleum Corp. Ltd., and LIC Housing Finance. Other CP issuers include Birla Group Holdings Pvt. Ltd., Kitsetsu Saison Finance India, IIFL Home Finance, Indian Oil Corp., L&T Metro Rail Hyderabad, and Godrej Industries.

 

EXIM raised INR 40 billion through 91-day CPs at a weighted average yield of 7.10%, while L&T Ltd. raised INR 22 billion at 7.10%, according to data from the Clearing Corp of India. Indian Oil raised INR 3.5 billion at 6.15%, while L&T Metro Rail Hyderabad raised INR 6 billion at 7.65%.

 

In the secondary market, CD trading volume surged to INR 155.55 billion Wednesday from INR 149.60 billion Tuesday, according to CCIL data. CP trading volume also rose to INR 142.00 billion from INR 138.10 billion Tuesday. 

 

--Primary market
* HDFC Bank, City Union Bank, Central Bank of India, IDFC FIRST Bank, The Federal Bank, and Bank of Baroda were among those that raised funds via CDs.

* EXIM, NABARD, L&T Ltd., Bharat Petroleum Corp. Ltd., and LIC Housing Finance, Birla Group Holdings Pvt. Ltd., Kitsetsu Saison Finance India, IIFL Home Finance, Indian Oil Corp., L & T Metro Rail Hyderabad, Godrej Industries were major issuers of CPs. 

 

--Secondary market

* Punjab National Bank's CD maturing Thursday was traded eight times at a weighted average yield of 5.24%
* Relaince Retail Ventures Ltd.'s CP maturing Thursday was traded seven times at a weighted average yield of 5.24%

 

The following were the volumes, in INR billion, in the secondary market for short-term debt at 1811 IST, as detailed on CCIL's F-TRAC platform:

 

Certificates of deposit		Commercial paper
Wednesday	Tuesday	Wednesday	Tuesday
157.35	149.60	142.28	138.10

 

End

 

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

 

Edited by Deepshikha Bhardwaj

 

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