Issuance of certificates of deposit (Cds) rose slightly today because some banks placed CDs to refinance some of their papers maturing this month, dealers said.
Demand was also strong from a few mutual funds that received big investments in their liquid-plus schemes, dealers said. Today, banks placed CDs worth Rs 1,000 crore, up from Rs 800 crore of CDs placed on Monday.
“CD issuance today was just a rollover process. We have some Cds maturing in June and there were investors also for one-year segment, so issuance picked up today,” said an official with a state-owned bank.
Today, three-month CDs were quoted at 3.55-3.75 per cent, down from 3.65-3.85 per cent on Monday, while three-month CPs were dealt at 4.40-5.20 per cent, down from 4.50-5.30 per cent.
Companies are scheduled to pay advance tax for the June quarter by Monday. on Monday, L&T Finance placed Rs 100 crore of commercial papers maturing on August 11 at 4.25 per cent and another Rs 100 crore of CPs maturing on August 12 at 4.20 per cent.
