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Informist, Wednesday, Jul. 22, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit were largely unchanged across tenors Wednesday as investors remained on the sidelines amid uncertainty over the escalating tensions in West Asia and tightening banking system liquidity due to month-end factors, dealers said. Trading activity in the commercial paper market also remained subdued, with dealers preferring to wait-and-watch until there is greater clarity on the geopolitical situation.

 

Three-month and six-month AAA-rated certificates of deposit were unchanged at 6.85-6.90% and 6.90-6.95%, respectively. Activity in the one-year segment was negligible, while most secondary market trades were concentrated in papers maturing between December and March, dealers said.

 

Yields on AAA-rated commercial papers issued by non-banking finance companies were also largely unchanged. There were no trades in the three-month and six-month segments, while one-year papers were quoted at 7.55-7.60%.

 

"The market has been largely flat over the past few days. The uncertainty surrounding developments in West Asia has made participants cautious, and month-end liquidity conditions have further dampened activity," a dealer at a brokerage firm said.

 

Yields could ease in early August if banks receive sizeable inflows under the foreign currency non-resident (bank) deposit scheme, a dealer at a public-sector bank said.

 

Primary issuance of certificates of deposit rose to INR 45 billion as of 1713 IST from INR 20.90 billion on Tuesday, according to data on the Clearing Corp. of India Ltd. Three banks tapped the market. Punjab National Bank raised INR 22.50 billion through 29-day certificates of deposit at a weighted average yield of 6.25%. Jammu and Kashmir Bank raised INR 15 billion through 214-day and 228-day papers at 7.70?ch, while IDFC FIRST Bank raised INR 7.50 billion through 91-day paper at 7.02%, CCIL data showed.

 

Commercial paper issuances fell, with overall activity remaining below normal. Issuance fell to INR 48.40 billion as of 1700 IST from INR 91.55 billion on Tuesday. Among major issuers, Chennai Petroleum Corp., Bajaj Finance, and Cholamandalam Investment and Finance Co. raised INR 3.75 billion each at weighted average yields of 6.40%, 6.55%, and 6.60%, respectively. Small Industries Development Bank of India raised INR 4.50 billion through 54-day and 67-day papers at 6.50%, while NTPC raised INR 6.25 billion through 48-day, 62-day, and 63-day papers at weighted average yields of 6.55%, 6.55%, and 6.48%, respectively.

 

Wednesday, REC raised INR 30 billion through three-month CP at 6.90%, dealers told Informist. 

 

Secondary market turnover in certificates of deposit rose to INR 140.55 billion at 1715 IST from INR 73.70 billion on Tuesday, according to CCIL data. Commercial paper turnover also increased to INR 33.50 billion from INR 17.00 billion. "Secondary market volumes were higher because investors were selling existing holdings to participate in primary issuances offering relatively attractive levels," the dealer at the public-sector bank said. 

 

According to dealers, most secondary market activity was concentrated in the eight- to nine-month segments, particularly papers maturing around December. "Participants are relatively comfortable in that part of the curve. Activity across the rest of the curve will depend largely on how the situation in West Asia unfolds," the dealer said.

 

The net liquidity absorbed by the Reserve Bank of India, a proxy for banking system liquidity surplus, was INR 92.89 billion Tuesday, sharply down from INR 695.96 billion on Monday due to outflows for GST payments and as banks increased their cash balances with the RBI, dealers said. Banks raised their cash balances with the RBI to INR 8.32 trillion Tuesday from INR 8.19 trillion Monday. 

 

"The current liquidity is also not helping people to confidently trade in the market, so I think the levels would be on the higher side at least till the first weeks of August," the dealer at the brokerage firm said. 

 

--Primary market
* Punjab National Bank, Jammu and Kashmir Bank, and IDFC FIRST Bank were the only CD issuers Wednesday.   

* Chennai Petroleum Corp., Bajaj Finance, Cholamandalam Investment and Finance Co., Small Industries Development Bank of India, NTPC, LIC Housing Finance, and ICICI Securities were among the CP issuers Wednesday.

 

--Secondary market

* Union Bank of India's CD maturing Thursday was traded six times at a weighted average yield of 5.32%
* Infina Finance's CP maturing Thursday was traded once at a weighted average yield of 5.44%

 

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
Wednesdy	Tuesday	Wednesday	Tuesday
140.55	73.70	33.50	17.00

 

End

 

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

 

With inputs from Nandini Sinha

Edited by Saji George Titus

 

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