Banks holding off upping term deposit rates by relying on CD issuances for resource mobilisation
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Banks raised ₹19,905 crore through net incremental Certificate of Deposits in October.
- ✓By choosing these short-term instruments, banks avoided raising term deposit rates despite shrinking liquidity.
- ✓V Rama Chandra Reddy said, "A particularly noteworthy feature is the widening term premium." Banks now prefer these flexible options over locking in long-term deposits.
Story at a Glance
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- MARKET
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- Business Line
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- 3 Minute(s)
- Market Focus
- India Economy
Net incremental CD issuance of ₹19,905 crore in October as weighted average rate rises to 6.93%; term deposit rates stay unchanged
Banks seem to be holding off upping term deposit rates in the wake of the hike in repo rate and shrinking liquidity surplus by relying on Certificate of Deposits (CD) issuances for resource mobilisation.
While CDs aggregating ₹78,290 crore matured in October 2026, fresh issuances were higher at ₹98,195 crore, resulting in net incremental issuance of ₹19,905 crore. This indicates that banks raised resources beyond the amount required to replace maturing CDs.
The weighted average rate (WAR) of CD issuances in October 2026 rose to 6.93 per cent even as the WAR on CDs that matured in the month was at 6.57 per cent.
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