While the SBI issue will be the largest at Rs 5,000 crore, BoB's and SBP's will be of Rs 1,500 crore and Rs 1,000 crore respectively.

Outstanding CD issues for the fortnight ended November 6, 1998 (the latest figures available in the Reserve Bank weekly bulletin), at Rs 5,858 crore is lower than the previous fiscal's comparable figure of Rs 8,517 crore on (November 7, 1997).

The CD-rating exercise undertaken by SBI, BoB, and SBP, money-market sources surmise, "is a just-in-case move given the fact that call rates have been inching up in recent times and fears that the deposit growth may not be buoyant next fiscal. The CD issues will most probably hit the market some time early next fiscal". The CD programme of these banks has been lined up at a time when the option of using the differential interest rate to raise resources has been offered to banks.

Activity in the CD market was sluggish in the first three quarters of 1997-98 on account of low call rates, and outstanding amounts declined from Rs 12,134 crore on March 28, 1998, to Rs 6,607 crore by December 19, 1997. However, in the last quarter of 1997-98, outstanding CDs rose sharply from Rs 9,921 crore at the end of the fortnight February 13, 1998, to Rs 12,313 crore by February 27, 1998, before peaking out at Rs 14,584 crore at the end of the fortnight April 10, 1998.

The trend in the fiscal so far has been one of a higher year-on-year M3 growth at 19.9 per cent (17.6 per cent excluding RIBs), as compared to the 11.4 per cent in 1997-98. While call rates currently ruling at 9 per cent levels are lower than the low/high of 7-17 per cent in February '98, the latter was on account of the Reserve Bank's measures to support the rupee.

Call rates in February '99 have been inching up over the last couple of weeks. Dealers, while pointing out that interest payments on gilts (12.40 per cent 2013; 9.50 per cent 2008; 13.65 per cent 2007 and 11.75 per cent 2001) may soften call rates this fortnight, cite a potentially higher borrowing programme next fiscal, adding: "There is an outflow of Rs 4,417 crore in the very first week of 1999-2000 with the redemption of the 12 per cent 1999."