Banks continue to rely on certificates of deposits amid liquidity woes

Outstanding amount on CDs hits all-time high of Rs 5.19 trillion as of fortnight ending February 7

Banks continue to rely on raising funds through certificates of deposit (CDs) amid tight liquidity conditions. Consequently, the outstanding amount on CDs reached an all-time high of Rs 5.19 trillion as of the fortnight ending February 7, according to data from the Reserve Bank of India (RBI).

 

Meanwhile, with expectations of another rate cut by the RBI’s Monetary Policy Committee in the next meeting and a further decline in long-term borrowing costs, the volume of commercial papers (CPs) outstanding reached Rs 4.79 trillion as of the fortnight ending February 15, its highest level since October 2019.

 

“The deposit accretion has