INDIAN BANKS RAISE 64.40 BN. RUPEES VIA CDs

Indian banks raised 64.40 billion rupees via certificates of deposits (CDs) on 7^th March, lower than 72 billion rupees raised on 4^th March.

The yield on the three-month Reuters CD benchmark was steady at 10.10 per cent while the one-year Reuters CD fixing was up 5 basis points at 10.20 per cent.

"CD yields were broadly flat with an underlying buying bias. The three-month paper is a reflection on the actual liquidity in the system and some government spending is keeping a lid on it temporarily," a banker with a foreign bank said.

"I see the three-month CD yields move up to 10.15 to 10.20 per cent when the advance tax outflows happen," the banker added.

Dealers said banks are buyers in the one-year CDs while mutual funds are active in the three-month segment.

Banks borrowed a total of 487.7 billion rupees from the central bank's twin repo auctions, lower than 501.80 billion rupees it injected on 4^th March.

According to Thomson Reuters data, volumes in the secondary market were at 3.25 billion rupees, lower than 4.35 billion rupees on 4^th March.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/indian-banks-raise-6440-bn-rupees-via-cds/articleshow/7648282.cms