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Banks raise over Rs 1 trn through CDs in Dec amid liquidity crunch

CDs, which are short-term debt instruments, are utilised by banks to raise funds

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Anjali Kumari Mumbai

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In an effort to fortify their balance sheets before this quarter’s end, commercial banks have raised Rs 1.16 trillion through certificates of deposit (CDs) in December -- a period marked by tight liquidity conditions.

This is the first time in the ongoing financial year that CD issuances have surpassed the Rs 1 trillion threshold in a month, according to data from the Clearing Corporation of India (CCIL). 

CDs, which are short-term debt instruments, are utilised by banks to raise funds. In November, banks had raised Rs 75,884 crore via these instruments.

This surge in CD issuances comes as deposit growth

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