NaBFID issues Rs 5K-cr 1-yr CD at 6.95%

National Bank for Financing Infrastructure and Development (NaBFID) has successfully issued Rs5,000 crore one-year certificate of deposit (CD) at 6.95 per cent.

NaBFID’s successful Rs5,000 crore one-year CD issuance at 6.95 per cent is an important signal for the short-term institutional funding market. For a debut issuance, pricing 5–7 basis points finer than comparable AIFI issuers such as NABARD and SIDBI reflects both investor confidence and strong demand depth in the money market segment. Talking to Bizz Buzz, Venkatakrishnan Srinivasan, a bond market veteran, says, “The fact that the issue was reportedly oversubscribed and closed at a tighter spread indicates that NaBFID is being perceived not merely as a new issuer, but as a high-quality quasi-sovereign credit with a clear policy mandate.”

In the current liquidity environment, institutional investors — particularly mutual funds, banks, and treasury desks — appear comfortable allocating to well-rated public sector development finance institutions, he said.

From a market structure perspective, this issuance also deepens the AIFI segment in the certificate of deposit space. Traditionally dominated by banks, the CD market is now witnessing greater participation from development finance institutions, which helps diversify short-term funding channels. For NaBFID, establishing a CD curve at competitive pricing is strategically important. It builds funding optionality and creates benchmarks for future rollovers, CPs, and potentially longer-tenor bond issuances.

More importantly, this fund raise aligns with NaBFID’s broader mandate as India’s dedicated infrastructure financing institution. Access to cost-efficient short-term liquidity strengthens its asset-liability management framework, enabling it to support long-gestation infrastructure projects while maintaining balance sheet prudence.