Outstanding CP falls Rs 1 trillion since Aug 2025 as CD issuances rise

Investors are moving away from commercial papers towards certificates of deposit as issuances and rates rise, with banks tapping CDs to manage deposit tightness, RBI data show

Investors are moving away from the commercial paper (CP) market towards certificates of deposit (CDs), as CD issuances have increased along with rates on these short-term instruments. Investors are finding the CD market more attractive from both a risk and return perspective, particularly as banks increasingly tap this market to address deposit tightness in the system. Outstanding CP issuances have declined by about Rs 1 trillion since August 2025, while CD issuances have risen by a similar amount during the same period, up to the fortnight ended January 31, latest data by the Reserve Bank of India showed.