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Informist, Friday, Sept. 18, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit rose across key short-term tenors on Friday as market participants remained cautious despite ample liquidity in the banking system, dealers said. Market participants are also awaiting the Reserve Bank of India's next open market operation sale, which has kept buying interest subdued.

 

AAA-rated three-month CD yields rose 5 basis points to 6.15-6.20% from 6.10-6.15% Thursday, and six-month CD yields also rose 5 bps to 6.75-6.80% from 6.70-6.75% in the previous session. Yields on the one-year segment were at 7.40-7.50%. The shorter segments and February-March maturities were the most active in the CD market.

 

CD yields rose despite surplus liquidity in the banking system, which remained elevated. The net liquidity absorbed by the RBI – a proxy for the banking system liquidity surplus – was INR 6.94 trillion Thursday, down from INR 7.38 trillion Wednesday.

 

Following the fall in the liquidity surplus, the RBI reduced Friday's three-day variable rate reverse repo auction to INR 2.25 trillion. At Friday's auction, the RBI accepted bids worth INR 2.23 trillion at 5.24%.

 

In the CP market, yields were mixed. AAA-rated three-month CPs issued by non-banking financial companies were quoted at 6.90-6.95% Thursday, while six-month CP yields were at 7.10%, up 10 bps from 7.00%. There were no trades in the one-year segment.

 

"The market is very dull today as people are in wait-and-watch mode ahead of the next OMO sale. Compared to last month, the market is less jittery now, but people are not coming forward amid ample liquidity," a dealer at a brokerage said. 

 

Primary issuances in the CP market rose to INR 120.00 billion from INR 110.55 billion Thursday, according to CCIL data. Reliance Retail Ventures, Motilal Oswal Financial Services, ICICI Securities, HDFC Securities, Grasim Industries and Godrej Consumer Products were among the issuers.

 

Reliance Retail Ventures borrowed INR 30.75 billion through a 49-day CP at a weighted average yield of 6.07%, while ICICI Securities raised INR 14.50 billion through 63- and 91-day CPs at yields of 6.95% and 7.08%, respectively. HDFC Securities raised INR 9.05 billion through 91- and 75-day CPs at 7.05% and 7.02%, respectively. Grasim Industries and Godrej Consumer Products raised INR 4 billion each at 6.19% and 6.13%, respectively.

 

"In the coming week also, I think the market will be dull and range-bound, and CD issuances will also be very low," the brokerage dealer said.

 

In the CD market, issuances totalled INR 112.00 billion, with three banks – HDFC Bank, Bank of India and Karur Vysya Bank – tapping the market. HDFC Bank raised INR 101.00 billion through 116-day CDs at a weighted average yield of 6.80%, accounting for the bulk of the day's CD issuances. Bank of India raised INR 6.00 billion at a weighted average yield of 6.18%, while Karur Vysya Bank raised INR 5.00 billion through 30-day CDs at 5.90%.

 

In the secondary market, CD volumes rose sharply to INR 127.80 billion from INR 80.60 billion Thursday, suggesting stronger trading activity in CDs even as primary issuance remained concentrated in a few banks. In contrast, CP volumes fell slightly to INR 96.10 billion from INR 98.60 billion Thursday.

 

--Primary market

* HDFC Bank, Bank of India, and Karur Vysya Bank were the CD issuers Friday.

* Reliance Retail Ventures, Motilal Oswal Financial Services, ICICI Securities, HDFC Securities, ICICI

  Securities, Grasim Industries, Godrej Consumer Products were among the CP issuers Friday.  

 

--Secondary market

* HDFC Bank's CD maturing Monday was traded 12 times at a weighted average yield of 5.08%.
* Reliance Retail Ventures' CP maturing Wednesday was traded once at a weighted average yield of 5.35%.

 

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
Friday	Thursday	Friday	Thursday
127.80	80.60	96.10	98.60

 

End

 

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

 

Edited by Saji George Titus

 

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