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Informist, Thursday, Jun. 18, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit rose across most tenors on Thursday, as liquidity in the banking system tightened, dealers said. Barring a fall in three-month papers, yields on commercial papers were largely unchanged, they said. The three-month CD and CP segment remained the most active in the secondary market because of higher supply and active investor participation.

 

The Reserve Bank of India's net liquidity absorption, a measure of surplus liquidity in the banking system, fell sharply to INR 47.71 billion on Wednesday from INR 238.81 billion a day earlier. Liquidity surplus in the banking system declined due to outflows for advance taxes and as banks maintained higher cash balances with the RBI at the start of the reporting fortnight. Banks' cash balances rose to INR 8.26 trillion on Wednesday from INR 8.04 trillion Tuesday.

 

Liquidity remains tight, but the RBI is actively managing conditions through variable rate repo operations. Market participants appear comfortable with the liquidity being injected, dealers said. 

 

In the secondary market, yields on AAA-rated CDs rose 5 basis points in the three- and six-month segments, while those on the one-year segment were unchanged. Three-month CD yields rose to 6.65%-6.70% from 6.60%-6.65% on Wednesday, while those on the six-month segment increased to 7.25%-7.30% from 7.20%-7.25%. One-year CD yields were steady at 7.30%-7.35%.

 

Also, mutual funds showed limited interest in one-year papers due to uncertainty over future rate actions and preferred to sell one- and two-month papers while buying papers maturing in three- and four-month tenors. "In the upcoming days and weeks, I see an uptick of 5-10 bps in three-month CD yields to 6.75-6.80% due to the month-end (redemption pressure from mutual funds), but overall market is stable and (there are) no uncertainties as of now," a dealer from a private-sector bank said. 

 

Among commercial papers, yields on AAA-rated papers issued by non-banking financial companies fell 5 basis points in the three-month segment, while six-month and one-year yields were unchanged. Three-month CP yields eased to 6.90%-6.95% from 6.95%-7.00% on Wednesday. Six-month and one-year yields were steady at 7.50%-7.55% and 7.65%-7.70%, respectively.

 

Primary market CD issuances fell sharply to INR 57.50 billion by 1811 IST from INR 113.50 billion on Wednesday, according to data from Clearing Corp of India Ltd. Federal Bank, ICICI Bank, Union Bank of India, IndusInd Bank, and Punjab National Bank were among the banks that tapped the market for funds.

 

Federal Bank raised INR 12.5 billion through three CDs. It raised INR 2.5 billion through a 28-day CD at a weighted average yield of 6.30% and raised INR 5 billion each through CDs maturing on Sept. 17 and Sept. 18 at weighted average yields of 6.60% and 6.68%, respectively. ICICI Bank and Punjab National Bank raised INR 12.5 billion each through an 88-day CD and 91-day CD at 6.60% and 6.59%, respectively, while Union Bank of India raised INR 17.50 billion through a 91-day CD at 6.59%. 

 

CP issuances rose to INR 98.08 billion as of 1814 IST from INR 86.47 billion on Wednesday. Issuers included Reliance Jio Infocomm, Hindustan Petroleum Corp., Tata Power Co., Godrej Properties, L&T Finance, ICICI Securities, Motilal Oswal Financial Services, Can Fin Homes, and UltraTech Cement.

 

Hindustan Petroleum raised INR 13 billion through 89-day CPs at a weighted average yield of 6.54%, while Reliance Jio Infocomm raised INR 7.5 billion through 90-day CPs at 6.60%. L&T Finance raised INR 2.25 billion at 7.65%, according to CCIL data. UltraTech Cement raised INR 2.5 billion at 6.70%, while ICICI Securities raised INR 1 billion through one-year CPs at 7.76%.

 

In the secondary market, CD trading volume rose to INR 156.40 billion on Thursday from INR 141.60 billion on Wednesday, according to CCIL data. CP trading volume increased sharply to INR 129.45 billion from INR 57.20 billion.

 

--Primary market
* Federal Bank, Union Bank of India, IndusInd Bank, ICICI Bank, and Punjab National Bank were the CD issuers. 

* Reliance Jio Infocomm, Hindustan Petroleum Corp., Tata Power, Motilal Oswal, Can Fin Homes, Dolat Algotech, Indostar Capital Finance, Godrej Properties, L&T Finance, ICICI Securities, Ultratech Cement were among the CP issuers. 

 

--Secondary market

* UCO Bank's CD maturing Friday was traded six times at a weighted average yield of 5.27%
* Hindustan Petroleum Corp.'s CP maturing Friday was traded 11 times at a weighted average yield of 5.21%

 

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
Thursday	Wednesday	Thursday	Wednesday
156.40	141.60	129.45	57.20

 

End

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

 

Edited by Saji George Titus

 

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