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Informist, Monday, Aug. 31, 2026

By Vaishali Tyagi 

NEW DELHI – Borrowing through certificates of deposit fell Monday due to lower funding requirements amid ample liquidity driven by strong inflows from Foreign Currency Non-Resident (Banks) deposits, dealers said. Most banks continued to stay on the sidelines as no CD was issued in the primary market Monday as compared with issues of INR 9 billion on Friday, according to Clearing Corp. of India Ltd data.

Dealers said the short-term debt market remained quiet Monday, with weak investor appetite amid elevated crude oil prices weighing on sentiment. Brent crude oil prices continued to pressure market sentiment, while fading hopes of a peace deal between the US and Iran further dampened the mood, dealers said. The Brent crude oil futures contract for November delivery was at $91.14 per barrel at 1600 IST, down slightly from the day's high of $91.45 per barrel but up from $89.61 per barrel at the end of Indian trading hours Friday. 

Market participants added that with the Reserve Bank of India's swap window for Foreign Currency Non-Resident (Banks) deposits closing Monday, short-term yields are expected to rise. "...banks have enough liquidity these days, first they are flused with FCNR deposits, Secondly, in general, liquidity is sufficient in the system these days," said a dealer. "So, only those banks who did not get aggressive (strong) FCNR deposits, they (banks) might come to issue CDs soon in September."

The net liquidity absorbed by the RBI — a proxy for liquidity surplus — was INR 5.04 trillion Sunday, slightly up from INR 5.01 trillion Saturday on strong inflows from the Centre's month-end expenditure and banks' hefty flows through FCNR(B) deposits, dealers said.

Yields on AAA-rated three-month CD were broadly unchanged at 6.37-6.43% from 6.35-6.40% on Friday. Six-month CD were also steady at around 6.79-6.85% from 6.80% Friday, while one-year CD yields were 7.20-7.25%. The three-month segment was the most active. Dealers said there were no major trades in six-month and above segment. 

In the commercial paper market, yields were largely unchanged from Friday with no major movement, dealers said. However, primary market CP issuances rose sharply to INR 119.50 billion from INR 89.42 billion on Friday, as companies rolled over maturing papers to meet their funding needs, dealers said.

The National Bank for Agriculture and Rural Development raised INR 50 billion through 91-day CPs at a weighted average yield of 6.44%. Bajaj Finance raised INR 20 billion through a 95-day paper at 6.99%. Other key issuers included Tata Realty and Infrastructure, Tata Housing Development Co., Kotak Securities, and LIC Housing Finance. 

In the secondary market, volume in CD market rose to INR 156.25 Monday from INR 103.80 Friday, while volume in CP market fell to INR 37.80 billion from INR 57.40 billion. 

--Primary market

* No CD was issued Monday. 

* NABARD, Bajaj Finance, Tata Realty and Infrastructure, Tata Housing Development Co., Kotak Securities, and LIC Housing Finance were among the key CP issuers on Monday.

--Secondary market

* Canara Bank's CD maturing Tuesday was traded 16 times at a weighted average yield of 5.17%.
* HDFC Securities' CP maturing Tuesday was traded twice at a weighted average yield of 5.16%.

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:

End

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

Edited by Pankaj Aher

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