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Informist, Monday, Aug. 3, 2026

By J. Navya Sruthi

MUMBAI – Volume and issuances in the short-term debt market rose Monday as yields on papers of up to one-year maturity fell amid higher liquidity surplus, dealers said. The liquidity surplus in the banking system as on Friday was at the highest since May 15 due to inflows through the government's month-end spending for salaries and pensions and foreign currency non-resident bank deposits.   

Certificates of deposit turnover rose to INR 112.70 billion as of 1750 IST Monday from INR 56.75 billion Friday, according to data from Clearing Corp. of India Ltd. Issuances of CDs rose to INR 62.75 billion Monday from INR 11.5 billion Friday. Similarly, commercial papers' turnover rose to INR 76.50 billion at 1755 IST Monday from INR 19.25 billion Friday. However, issuance of commercial paper fell to INR 16.25 billion as of 1755 IST from INR 28.51 billion Friday.

Indian Bank has raised INR 15.25 billion through a CD maturing on May 24 at 7.05% as yields fell Monday amid higher liquidity, according to a dealer at the bank. Dealers said the rates on the three-month CD in the primary market were down by five basis points over Friday at 6.70-6.75% Monday. Six-month and one-year CD rates were at 6.80-6.85% and around 7.15% in the primary market Monday, also up by almost 10 bps from Friday, dealers said.

Indicative yields on three-month CDs were at 6.80-6.85%, down by five bps. Dealers said there were no deals in the secondary CD market for either the six-month or one-year segments. Volume in the CD market was at INR 112.70 billion, while INR 76.30 billion deals were in the up to three-month segment, that is till the end of October.

Similarly, there were no deals in the six-month or one-year segment in the secondary CP market. Three-month CP rates were at 7.10-7.15% in the primary market, down by almost 10 bps, dealers said. Tata Steel raised INR 2 billion through 30-day CP at 6.70% Monday. The company also raised INR 7.50 billion through 88-day CP at 6.93%, according to Clearing Corp. of India Ltd. data. IIFL raised INR 3 billion through two CPs with different maturities, according to Clearing Corp. of India Ltd. data. 

Dealers said mutual funds and some banks were buying short-term papers maturing in three months due to uncertainty and lack of clarity about the key interest rates, a dealer at a state-owned bank said. "Mutual funds were buying and some banks as well because of enough liquidity with them," the dealer said.   

The net liquidity absorbed by the Reserve Bank of India – proxy for liquidity surplus – was at INR 1.93 trillion on Sunday, against INR 1.91 trillion Saturday and INR 2.33 trillion Friday. The liquidity surplus on Friday was the highest since May 15 on the back of inflows from the government's month-end spending and inflows from foreign currency non-resident bank deposits. However, liquidity fell over the weekend as banks increased their cash balance with the RBI, dealers said. The cash balances with the RBI rose to INR 9.04 trillion on Sunday and INR 9.05 trillion on Saturday from INR 8.26 trillion Friday.  

--Primary market 

* HDFC Bank, Indian Bank raised funds through CD Monday.

* HDB Financial, Tata Steel, ICICI Securities, and IIFL Finance raised funds through CP Monday.

--Secondary market

* IndusInd Bank's CD maturing Aug. 10 was traded six times at a weighted average yield of 6.4003%.
* Bharat Petroleum Corp.'s CP maturing Tuesday was traded eight times at a weighted average yield of 5.0355%.

The following were the volumes, in INR billion, in the secondary market for short-term debt at 1830 IST, as detailed on CCIL's F-TRAC platform:

End

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

Edited by Deepshikha Bhardwaj

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