Banks have reduced their borrowings through Certificates of Deposit (CDs) after the finance ministry issued norms that required banks to reduce the proportion of bulk deposits and CDs to 15 per cent of the total deposits by March 31, 2013.
The norms were issued earlier this year. The total amount on CDs by commercial banks stood at Rs 3,57,190 crore for the fortnight September 21, compared with Rs 3,83,472 crore for the fortnight ended September 23, 2011, shows Reserve Bank of India (RBI) data. CDs are promissory notes issued by commercial banks. They are time deposit that restricts holders from withdrawing funds on demand. CDs are short-term instruments.
