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Informist, Monday, Sept. 21, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit and commercial paper eased in key short-term tenors Monday as demand emerged in select December and Jan-Feb-Mar maturities amid surplus liquidity, though market participants remained cautious ahead of the Reserve Bank of India's next monetary policy meeting, dealers said.

 

"Despite having demand in certain tenors, people are in wait-and-watch mode as the next Reserve Bank of India policy meet is nearing," a dealer said. "AAA"-rated three-month CD yields were quoted at 6.08-6.10%, down from 6.15-6.20% Friday, while six-month CD yields fell 5 basis points to 6.70-6.75% from 6.75-6.80%. There were no trades in the one-year segment. Jan-Feb–Mar maturities were the most active in the CD market.

 

"There were very few trades in general and in the six-month segment as people are in wait-and-watch mode ahead of policy," a dealer from a public-sector bank also said.

 

The RBI's net liquidity absorbed--a proxy for the banking system's liquidity surplus--was INR 6.2 trillion Friday, down from INR 6.94 trillion Thursday due to INR 500 billion of outflows related to the open market operations auction conducted Thursday. Dealers expect the RBI's overnight INR 1-trillion variable rate repo auction to be undersubscribed because of higher borrowing rates in the overnight market.

 

"We see less subscription in VRRR due to higher overnight rates and outflows during the day," a dealer at a private-sector bank said.

 

In the CP market, very few trades were reported Monday. "AAA"-rated three-month CP issued by non-banking finance companies were quoted at 6.78%, down from 6.90-6.95% Friday, while six-month CP yields were unchanged at 7.10%. There were no trades in the one-year segment. Shorter maturities, particularly September and October paper, were active.

 

Primary issuances in the CP market rose to INR 136.02 billion from INR 120.00 billion Friday, according to Clearing Corp. of India Ltd. data. NTPC Ltd., REC Ltd., Reliance Retail Ventures, L&T Metro Rail (Hyderabad) Ltd., and Birla Group were among the issuers.

 

NTPC Ltd. borrowed INR 30 billion through a 79-day CP at a weighted average yield of 6.15%. REC Ltd. raised INR 24.50 billion through 179-day CP at a yield of 6.87%. Reliance Retail Ventures raised a total of INR 26.00 billion through 46- and 52-day CP at 6.07% for both. L&T Metro Rail (Hyderabad) raised a total of INR 12 billion at 7.00%.

 

"In the coming days, everything depends on the geopolitical issues, but normally during the month the rates would be up," the dealer from the public-sector bank said.

 

In the CD market, issuances totalled to INR 45 billion, significantly down from INR 112.00 billion Friday, with three banks -- Bank of India, Punjab & Sind Bank, and Equitas Small Finance Bank Ltd. -- tapping the market. Bank of India raised INR 32 billion through 80-day CD at a weighted average yield of 6.18%. Punjab & Sind Bank raised INR 10 billion at a weighted average yield of 6.28% and Equitas Small Finance Bank raised INR 3 billion through 30-day CD at 6.55%.

 

In the secondary market, CD volumes fell slightly to INR 122.65 billion from INR 127.80 billion Friday. CP volumes fell more sharply to INR 72.65 billion from INR 96.10 billion Friday.

 

--Primary market

* Bank of India, Punjab & Sind Bank, and Equitas Small Finance Bank Ltd. were the CD issuers Monday.

* NTPC Ltd., REC Ltd., Reliance Retail Ventures, L&T Metro Rail (Hyderabad) Ltd., Birla Group were among the CP issuers Monday.  

 

--Secondary market

* Union Bank of India's CD maturing Tuesday was traded twice at a weighted average yield of 5.24%.
* Export-Import Bank of India's CP maturing Tuesday was traded 11 times at a weighted average yield of 5.29%.

 

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
Monday	Friday	Monday	Friday
122.65	127.80	72.65	96.10

 

End

 

Edited by Rajeev Pai

 

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