MUMBAI: Indian banks raised 43.35 billion rupees ($881.1 million) via certificates of deposit (CDs) on Thursday, compared with 61.12 billion rupees on the previous day.
Demand stayed robust from lenders because liquidity is anticipated to tighten further around mid-March due to tax outflows, which can push up CD rates.
The strain on liquidity continued, with banks' repo borrowing rising to 1.47 trillion rupees, above the RBI's indicated comfort level of 600 billion rupees of liquidity deficit.
The market is hoping for another cut in the banks' cash reserve ratio next month.
The yield on both the three-month Reuters CD benchmark and the one-year CD were steady at 10.30 percent and 10.15 percent, respectively.
About 4.25 billion rupees of CDs were traded in the secondary market on Thursday, compared with 5.15 billion rupees on Wednesday, Reuters data showed.
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