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Informist, Friday, Aug. 7, 2026

 

By Meera Nair

 

MUMBAI – Rates on certificates of deposit eased by 5 basis points across key tenors on Friday as active secondary market trading and surplus banking system liquidity supported sentiment following the Reserve Bank of India's monetary policy earlier this week, dealers said. Commercial paper rates were largely unchanged, although primary issuances increased as borrowers continued to refinance maturing debt.

 

Three-month certificate of deposit yields were quoted at 6.55-6.60%, down 5 bps from 6.60-6.65% Thursday, while six-month papers were quoted at 6.70-6.75%, compared with 6.75-6.80% the previous day. One-year CD yields were unchanged at 7.30-7.35%.

 

Dealers said trading was concentrated in February and March maturity papers as market participants preferred slightly longer maturities, while activity in shorter-tenor papers remained limited because of the weekend.

 

Three-month AAA-rated commercial papers issued by non-banking finance companies were quoted around 6.95%, while six-month papers were unchanged at 7.20-7.25%. One-year CP yields were dealt at 7.60-7.65%, compared with 7.62% Thursday.

 

Market participants said trading interest in the CP market remained focused on three-month papers, where issuers and investors continue to find better visibility on interest rates and easier refinancing opportunities.

 

Secondary market turnover in certificates of deposit rose to INR 140.05 billion from INR 134.95 billion on Thursday, according to Clearing Corp. of India Ltd. data, reflecting healthy trading activity despite a sharp fall in fresh issuances. Primary CD issuances declined to INR 16.25 billion from INR 100.00 billion a day earlier, with only Central Bank of India and CSB Bank Ltd. raising funds. Central Bank of India raised INR 10.25 billion through a 91-day CD at a weighted average yield of 6.65%, while CSB Bank raised INR 6.00 billion through a 91-day CD at a weighted average yield of 7.40%.

 

"Trading happened quite a bit in both the markets, especially in the CD market today (Friday), as people are more confident in the current environment and mutual funds are in a better position with less pressure. I thought they would be in sleep mode after the post-policy activity yesterday (Thursday)," a dealer with a brokerage firm said.

 

In the commercial paper market, secondary market turnover increased to INR 43.55 billion from INR 35.70 billion on Thursday. Fresh issuances also rose to INR 99.58 billion from INR 75.67 billion as companies continued to tap the market to refinance maturing borrowings, although overall market activity remained lower than immediately after the RBI policy.

 

National Bank for Agriculture and Rural Development, Adani Ports and Special Economic Zone Ltd., Titan Company, Godrej Consumer Products Ltd., Tata Capital Housing Finance, Julius Baer Capital India Pvt. Ltd., Kotak Securities, and Aditya Birla Housing Finance Ltd. were among the issuers.

 

NABARD raised INR 30.00 billion through commercial paper maturing on Nov. 6 at a weighted average yield of 6.80%. Titan Company raised INR 16.00 billion at 6.90%, while Adani Ports and Special Economic Zone raised INR 10.00 billion through 91-day paper at a weighted average yield of 6.92%. Godrej Consumer Products raised INR 8.00 billion at 6.68%, according to Clearing Corp. of India data.

 

Dealers expect CP issuances to outpace CD issuances in the coming weeks as non-bank borrowers refinance maturing papers, while banks remain comfortably funded after inflows under the Foreign Currency Non-Resident (Bank), or FCNR(B), deposit scheme. "In the coming weeks, I think there will be more CP issuances than CD issuances because they have more rollovers due. Banks, meanwhile, are in a comfortable position after the FCNR(B) flows are coming," a dealer with a brokerage firm said.

 

The dealer added that rates in both the CP and CD markets are likely to soften further as easing geopolitical tensions in West Asia and abundant liquidity continue to improve market sentiment.

 

The banking system remained in surplus liquidity, with the net liquidity absorbed by the RBI — a measure of surplus liquidity — at INR 3.61 trillion on Thursday, compared with INR 3.44 trillion on Wednesday. Banks' cash balances with the RBI stood at INR 7.88 trillion on Thursday, lower than INR 7.91 trillion the previous day, against an average daily cash reserve requirement of INR 8.03 trillion for the fortnight ending Aug. 15.

 

--Primary market 

*Central Bank of India and CSB Bank Ltd. were the only CDs issuers Friday.

* NABARD, Adani Ports and Special Economic Zone, Godrej Consumer Products Ltd., Tata Capital Housing Finance, Julius Baer Capital India Pvt. Ltd., and Aditya Birla Housing Finance Ltd., were among CP issuers Friday.

 

--Secondary market

* Axis Bank Ltd.'s CD maturing Monday was traded five times at a weighted average yield of 5.08%.
* ONGC Petro Additions Ltd.'s CP maturing Friday was traded once at a weighted average yield of 5.44%.

 

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
140.05	134.95	43.55	35.70

 

End

 

Edited by Deepshikha Bhardwaj

 

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