Certificate of Deposit Market: PSBs Overtake Private Banks
Why in the news
An RBI Bulletin showed a sharp reshuffle among issuers of certificates of deposit (CDs), with public sector banks leading.
Key facts
| Bank type | 2022 share | Dec 2024 share |
|---|---|---|
| Public sector | 6% | 69% |
| Private sector | 85% | 30% |
- Record ₹11.75 trillion in FY25; monthly peak ₹1.17 trillion in March 2025.
- Drivers: tight liquidity, loans outpacing deposits, year-end funding pressure.
- Mutual funds, helped by retail equity flows, buy most CDs.
What is a CD?
- A time deposit held for a fixed period at higher interest than savings accounts; terms run from months to years.
- Issued by banks, credit unions and brokerage firms offering brokered CDs.
Exam angle
- Source: RBI Bulletin; PSB share 6% to 69%.