Industry players say banks have ramped up mobilisation via CDs in recent months amid a pick-up in credit offtake.
Expectations of lower deposit growth and increased credit costs amid inflationary pressures have also driven banks to issue CDs over the past few months.
"The interest-rate cycle is turning. In such a scenario, liquidity is drying up. Also, banks are being opportunistic. They feel interest rates might notch up. Moreover, credit offtake has improved in the past few months and the growth of regular deposits might be going down. All these factors have led to increasing investments by funds in CDs," said Dwijendra Srivastava, chief investment officer-debt, Sundaram Asset Management.
This story is from the May 23, 2022 edition of Business Standard.
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This story is from the May 23, 2022 edition of Business Standard.
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