Surge in bank credit offtake leads to three-fold jump in CD issuance

Meanwhile, issuance of commercial papers---securities sold by companies to raise funds--dropped sharply to Rs 12.5 trn in FY23 (up to Feb 28) from Rs 19 trn over the same period last year

In a reflection of the huge increase in banks’ demand for funds on account of booming credit offtake, issuances of certificates of deposits (CDs) have surged by more than three times so far this financial year, Reserve Bank of India data showed.

“In the primary market, fund mobilisation through CD issuances was robust at Rs 6.3 trillion during the financial year so far (up to March 10), higher than Rs 2 trillion in the corresponding period last year reflecting banks’ additional demand for funds on account of buoyant credit offtake,” RBI staff wrote in the central bank’s March 2023 Bulletin.