Informist, Monday, Jan 2, 2023
By Vishal Sangani
MUMBAI – Canara Bank was the lone issuer of certificate of deposits today, raising a total of 21.00 bln rupees at 6.92% and 7.42% through papers maturing on Apr 5 and Jul 3, respectively.
The state-owned lender tapped the market for its funding needs and due to a strong growth in credit, dealers said.
According to the latest data from the Reserve Bank of India, advances in the banking system rose 17.4% on year to 131.55 trln rupees in the fortnight ended Dec 16. Deposits continued to lag credit growth, growing 9.4% on year to 173.53 trln rupees as on Dec 16.
In a report, CRISIL Ratings had said growth in disbursements by banks was likely to outpace the figure for non-banking financial companies at 13-15% on year this fiscal year, against 10-13% in the case of non-banking finance companies.
The growth will be contributed by the retail segment, the rating agency said. Bank credit to the retail segment, which was up 11.5% on year as of Oct, is projected to accelerate, rising 17-18% on year in the current fiscal year, primarily due to rising demand for home loans, it said.
Meanwhile, most banks remained on the sidelines due to surplus liquidity in the banking system.
Liquidity in the banking system is currently estimated to be in a surplus of 643.19 bln rupees, as against a deficit of 99.75 bln rupees on Friday.
Liquidity in the banking system returned to surplus due to inflows on account of the government’s month-end spending in the form of salaries and pension payouts, dealers said.
Issuances of commercial papers rose marginally today as a few companies tapped the market to meet their funding requirements and to roll over papers set to mature in the coming days, dealers said.
So far today, CPs aggregating 5.00 bln rupees were issued, as against 1.50 bln rupees on Friday. HDFC Credila Financial Services was the major issuer, raising 3.00 bln rupees through papers maturing in March-end at 6.95%.
The number of market participants in the primary market was also lower because of low issuances by manufacturing companies.
Rates on short-term debt papers were flat due to lower issuances, dealers said.
Rates on three-month CPs issued by non-banking finance companies were quoted at 7.25-7.55%, while rates on papers of manufacturing companies were quoted at 7.05-7.25%.
Rates on three-month CDs were quoted at 6.90-7.15%.
–Primary market
* ICICI Securities, Axis Securities and HDFC Credila Financial Services raised funds through CPs.
–Secondary market
* Indian Bank’s CD maturing on Tuesday was dealt at a weighted average yield of 6.0600%
* Century Textile and Industries’ CP maturing on Jan 12 was dealt at a weighted average yield of 6.8017%
At 1630 IST, 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:
NOTE: Details of the deals have been received from market sources.
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Vidhi Verma
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