Informist, Monday, Dec 11, 2023

By Asmita Patil

MUMBAI – Rates on three-month certificates of deposit rose today as the liquidity deficit in the banking system is expected to widen this week, dealers said.

At the end of trade on Friday, liquidity in the banking system was in a deficit of 127.97 bln rupees, against 162.54 bln rupees on Thursday, according to data from the Reserve Bank of India. Liquidity in the system is expected to remain in deficit due to scheduled outflows on account of advance tax payments and goods and services tax payments, dealers said.

Rates on three-month CDs rose to 7.37-7.57% from 7.30-7.50% on Friday. Bank of Baroda raised 17 bln rupees through three-month CDs at 7.37% today.

"If they (Bank of Baroda) had increased the quantum, they might have had to pay 7.40%," a dealer with a mid-sized brokerage firm said.

Rates on three-month commercial papers issued by non-banking finance companies were flat at 8.00-8.20%. Rates on papers of similar maturity issued by manufacturing companies were at 7.45-7.65%.

Fundraising through CPs rose today due to a big-ticket issuance by the National Bank for Agriculture and Rural Development, dealers said. The state-owned non-bank lender raised 50 bln rupees through papers maturing in three months at 7.44%. 

So far today, companies and financial institutions have raised 67.5 bln rupees through CPs, against 38.5 bln rupees on Friday.

--Primary market

* NABARD, Bajaj Finance, and Birla Group Holdings raised funds through CPs

* Bank of Baroda raised funds through CDs

--Secondary market
* HDFC Bank's CD maturing on Thursday was dealt at a weighted average yield of 7.0851%.

* Larsen & Toubro's CP maturing on Feb 5 was dealt four times at a weighted average yield of 7.4000%.

At 1700 IST, the following were the volumes, in bln rupees, in the secondary market for short-term debt, as detailed by the Clearing Corp of India's F-TRAC platform:

End

Edited by Rajeev Pai

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