Indian banks issue more certificates of deposits to secure cheap funding

Indian private and PSU banks have raised around Rs 30,000 cr through two-month to one-year CDs in the two weeks to Aug. 19, sharply higher than the roughly Rs 5,000 cr in the previous two weeks

Indian banks have increased their fundraising activity through the issuance of certificates of deposits, as funding in the banking system continues to contract, analysts said.

"Banks are not raising deposit rates, as they are able to get funds easily from money market by issuing CDs, and that too cheaply, and they may continue to opt for this route of fundraising for next few weeks," said Raju Sharma, head of fixed income at IDBI Mutual Fund.

Indian private and state-run banks have raised around Rs 30,000 crore ($3.76 billion) through two-month to one-year CDs in the two weeks to Aug. 19, sharply higher