Banks placed three-month certificates of deposit (CDs) on Wednesday due to demand for the papers from fund houses on inflows in their liquid schemes, dealers said.
“Demand from mutual funds was restricted mostly to three-month papers on view that rates on three-month papers could ease in coming months and due to the Sebi norms,” said a dealer with a mutual fund (MF).
As per Sebi guidelines, all debt securities, including floating rate securities, with residual maturity of over 91 days will be valued at the weighted average price at which they are traded on the valuation day.