Mumbai:Indian banks are increasingly using certificates of deposit (CDs) to meet their near-term funding requirements like managing the gap between credit offtake and deposit growth. Fund mobilisation through issuances of CDs so far this fiscal (up to October 4) jumped 69% year on year to ₹5.58 lakh crore, data from the Reserve Bank of India (RBI) showed. "Banks have increased deposit mobilisation efforts over the past few months by raising short-term term deposit (TD) rates to match asset-liability mismatch requirements, while some banks have decided to either opt for bulk TDs or redirect their focus on certificate of deposits," said Nitin Aggarwal, bank analyst with Motilal Oswal. "With systemic liquidity in deficit and strong competition for deposits, we anticipate TD rates will stay high in the near term, even with the expected rate cuts. However, banks will continue to prioritise a balanced mix of LCR (liquidity coverage ratio), CASA (current account/saving account), and retail deposits," he said. CDs are low-tenure deposits with relatively higher ticket sizes and elevated interest rates. Generally, money market funds, followed by corporate and trusts, are key participants in CDs."Deposits have remained prominent in FY25 as banks have intensified efforts to strengthen their liability franchise," said Sanjay Agarwal, director at CARE Ratings.