Short-term interest rates trigger demand for short-term funds from banks and India Inc

by Hansraj Agrawal | Jun 11, 2026 | Business

RBI’s recent measures aimed at attracting foreign currency inflows have softened money market rates meaningfully

There is no let up in demand for short-term funds of up to one year tenor from banks and India Inc despite the economy facing external headwinds due to the West Asia conflict as interest rates have softened at the shorter-end.

Fund raising via Certificate of Deposits (CDs) by Banks and via Commercial Papers (CPs) by corporates, primary dealers and all-India financial institutions in the current financial year so far (data up to June 8, 2026) stands comparison with year ago period (full quarter) amid banking system’s credit growth outpacing deposit growth.

In the current financial year (FY27) so far (up to June 8, 2026), banks’ cumulatively mopped up ₹2,18,290 crore via 190 CD issuances against ₹2,55,025 crore raised by 249 issuances in the first three months (Apri-May-June) of FY26, per data sourced from primary capital market information service provider Prime Database.

Similarly, in the current financial year (FY27) so far (up to June 8, 2026), India Inc cumulatively mopped up ₹3,60,219 crore via 1,712 CP issuances against ₹4,50,746 crore raised by 2,166 issuances in the first three months of FY26.

Balanced funding

As per latest RBI data, as of May 31, 2026, incremental credit growth of all scheduled banks at 17.44 per cent was 530 basis points higher than their incremental deposit growth of 12.14 per cent.

Venkatakrishnan Srinivasan, Founder and Managing Partner, Rockfort Fincap LLP, observed that the current softness in money market rates makes short-term funding attractive. So, borrowing via CDs and CPs are expected to be at an all time this fiscal.

However, he cautioned that excessive reliance on CPs and CDs and repeated rollovers could create asset-liability mismatches and refinancing risks, particularly for borrowers funding longer-tenor assets. A balanced funding strategy remains important.

Venkatakrishnan underscored that the movement in CP and CD rates during FY27 has been quite interesting, with the rates moving up as markets reacted to escalating geopolitical tensions in West Asia, rising crude oil prices and concerns regarding inflation and the interest rate outlook.

Moving down

However, following the RBI’s recent measures aimed at attracting foreign currency inflows and supporting the rupee, money market rates have softened meaningfully.

For example, between May 26 and June 10, 2026, 2-3 month Bank CD rates softened to around 6.85-6.90 per cent from 7.48-7.52 per cent earlier, while 12-month Bank CD rates declined to about 7.55 per cent from 7.98 per cent.

Similarly, 2-3 month “A1+” rated PSU and manufacturing company CP rates eased to around 6.92-6.93 per cent from 7.50-7.54 per cent earlier, and Housing Finance Company CP rates softened to around 6.95 per cent from 7.60-7.64 per cent.

Even NBFC CP rates witnessed a decline, with 2-3 month rates moving down to about 7.35-7.50 per cent from about 7.95-8.15 per cent.

Geopolitical pressures

Venkatakrishnan opined that the decline in rates reflects improved market confidence and expectations of better funding conditions arising from FCNR(B) deposit, External Commercial Borrowing and Overseas Foreign Currency Borrowing-related inflows.

However, many issuers remain uncertain about the medium-term interest rate outlook given the evolving geopolitical situation, crude oil volatility and potential inflationary pressures.

Consequently, several borrowers may continue to prefer short-term funding through CPs and CDs rather than locking into longer-term borrowings.

Published on June 11, 2026

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NCLT admits insolvency pleas against Anil Ambani and RInfra arm over ₹1,480 crore dues

by Hansraj Agrawal | Jun 11, 2026 | Business

The statement said the order will be reviewed and challenged before appropriate legal forums
| Photo Credit:
greenleaf123

The National Company Law Tribunal (NCLT) has admitted two significant insolvency petitions filed by public sector lenders — State Bank of India and Canara Bank, marking a fresh escalation in legal and financial challenges involving entities linked to Anil Ambani and RInfra.

The Mumbai bench of the NCLT admitted State Bank of India’s insolvency plea against Anil Ambani in his role as a personal guarantor for loans extended to Reliance Communications and Reliance Infratel, with dues of around ₹1,200 crore. The loans, sanctioned in 2016, turned delinquent soon after, and despite invocation of Ambani’s s personal guarantee, repayment has not been made.

Responding to the order, a spokesperson for Anil D. Ambani said the matter relates to a disputed personal guarantee allegedly extended in 2016, prior to the enactment of personal insolvency provisions. The spokesperson added that the underlying loans were used by Reliance Communications to repay borrowings from Chinese lenders and that Ambani derived no personal benefit. The statement said the order will be reviewed and challenged before appropriate legal forums.

In a parallel development, the NCLT also admitted Canara Bank’s plea to initiate insolvency proceedings against HK Toll Road Pvt. Ltd., a wholly owned subsidiary of RInfra, over unpaid dues of ₹283 crore. The tribunal held that disputes raised by the company with the National Highways Authority of India (NHAI) over alleged wrongful termination of a highway concession cannot dilute its liability toward the lender. It emphasised that insolvency proceedings are confined to determining the existence of debt and default, not adjudicating external contractual disputes.

Published on June 11, 2026

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AI will create more jobs than it disrupts, says Microsoft India chief

by Hansraj Agrawal | Jun 11, 2026 | Technology

Artificial Intelligence is poised to create more opportunities than it disrupts, and Indian engineers must shift their focus from job security fears of collaborating with the technology, a senior Microsoft India executive has said.

Rajiv Kumar, Managing Director and President of Microsoft India Development Center (IDC), in a blog post on Thursday, said the rapid evolution of technology is shrinking the lifespan of technical skills, making continuous learning and adaptability crucial for the workforce.

Citing the World Economic Forum’s Future of Jobs Report 2025, which surveyed over 1,000 employers across 22 industry clusters and 55 economies, Kumar noted that 39 per cent of core job skills are expected to change by 2030. In India specifically, an estimated 63 per cent of the workforce will need significant upskilling or reskilling by the same year.

“Virtually every major technology wave in history has ultimately created more opportunities than it destroyed… The real question is not whether new jobs will exist but how ready we are to step into those roles. The key to success will be the ability to adapt and learn these new skills. For young engineers, the key will be to ‘learn to learn’; this ability will help them adapt and take on the new and redefined roles,” he said.

Kumar stated that the conversation among young engineers is already shifting from concerns about Artificial Intelligence (AI) replacing them to finding ways to collaborate with the technology.

He drew parallels with the advent of the internet in 1995, emphasising that virtually every major technological wave has ultimately generated more opportunities than it destroyed.

“New roles like AI trainers, agent specialists, AI security experts, and many more are already emerging across Indian companies,” Kumar said, adding that the real challenge is the readiness of the workforce to step into these redefined roles.

He observed that employers are increasingly adopting skills-based hiring, prioritising a candidate’s potential and ability to learn over traditional credentials.

According to Microsoft’s latest ‘Work Trend Index 2026’, a majority of global AI users reported that the technology has enabled them to focus on high-value work and produce results they could not have achieved previously. AI is increasingly being utilised as a “thought partner” for deeper cognitive tasks, such as analysing information, problem-solving, and creative thinking.

“AI can help you code; it cannot decide your goals, understand your customer, or define what matters,” he noted, adding that judgment informed by experience, ethics, and empathy is what sets great professionals apart.

Highlighting India’s unique advantage, Kumar said the country combines the world’s second-largest engineering talent pool with immense digital ambition and the ability to innovate at scale.

He cited the Microsoft India Development Center (IDC) in Hyderabad, the company’s largest research and development hub outside the US, as a prime example of Indian teams acting as architects of global innovation rather than mere participants.

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Half of Indian firms plan AI-powered payroll rollout in next year: ADP

by Hansraj Agrawal | Jun 11, 2026 | Technology

One in two Indian companies plan to adopt artificial intelligence (AI)-powered payroll systems over the next 12 months as employers increasingly use automation and predictive analytics to manage workforce costs, compliance and compensation decisions, according to a report by payroll and workforce management company ADP.

However, companies are also becoming more cautious about the risks associated with using AI in payroll, particularly as payroll systems handle sensitive employee data, according to the report, titled Future of Pay 2026: India. ADP noted that the implementation of the Digital Personal Data Protection (DPDP) Act, 2023, will require organisations to strengthen data governance, cybersecurity safeguards and transparency around how AI-generated insights are used.

“Organisations must ensure AI systems comply with strict data protection norms such as purpose limitation, data minimisation and secure storage. This means that payroll systems will need tighter governance, transparent data usage policies, robust cybersecurity measures and addressing bias in automated decisions,” the report said.

The report, based on a survey of 344 senior human resource (HR), finance and payroll executives, comes at a time when companies are grappling with uneven labour markets, evolving regulations and the growing impact of AI on jobs and skills. More than 43 per cent of respondents identified workforce planning as a key challenge, highlighting the growing reliance on payroll data for hiring, retention and cost-management decisions.

Compliance emerged as another major concern. About 45 per cent of organisations cited payroll compliance across regions as a significant challenge, particularly amid changing labour regulations and preparations for the labour codes. Taxation, statutory benefits and wage regulations were identified as some of the most difficult compliance areas.

“The new Code on Wages has made employers rethink the way they have been doing payroll for many years. There is a near-term need to rebalance employee salaries in such a way that they are compliant with regulations, maximise employee experience and optimise costs,” the report said.

The report said employers are increasingly investing in governance frameworks and automation tools to reduce compliance risks and improve audit readiness. The Code on Wages has also prompted organisations to reassess salary structures and payroll processes as they prepare for eventual implementation.

Technology spending is increasingly focused on integrated HR and payroll systems, automated compliance tracking, employee self-service portals and AI-enabled payroll platforms. However, adoption remains uneven, with one-third of organisations saying innovation in HR and payroll technology continues to be constrained by legacy systems, integration challenges and data security concerns, the report showed.

Beyond technology and compliance, employee financial well-being is emerging as a key payroll priority. More than half of the organisations surveyed said financial wellness initiatives would be a focus area in the near term, while 42 per cent pointed to rising employee expectations around flexibility and transparency. Salary advances, flexible benefits and financial education programmes are increasingly being incorporated into broader rewards strategies.

The survey also found that managing remote and hybrid employees remains a challenge for 51.8 per cent of organisations, highlighting the continued operational complexity of distributed workforces.

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Broker’s Call: Lumax Auto Tech (Buy)

by Hansraj Agrawal | Jun 11, 2026 | Business

Target: ₹2,150

CMP: ₹1,604.45

For Q4 FY26, Lumax Auto Technologies reported robust quarterly revenue at ₹1,417 crore, 25 per cent year-on-year increase, reflecting sustained growth across key product segments, continued business momentum with OEMs and strong performance in the aftermarket portfolio. PAT grew 22 per cent in Q4FY26 to ₹98 crore, supported by continued focus on strengthening its standalone portfolio and improved utilisation of operational assets.

Lumax has a healthy order-book of around ₹1,450 crore, giving it strong revenue visibility for the next three years. The company expects to execute about 25 per cent of these orders in FY27, 54 per cent in FY28, and the remaining 21 per cent in FY29. Capex for FY27 is expected to be about ₹275-300 crore to support capacity expansion and new models.

Despite near-term geopolitical uncertainties and macroeconomic challenges, the company reiterated its medium-term revenue growth target of about 20 per cent CAGR through FY31. Demand momentum remains healthy entering Q1FY27, although margins may face temporary pressure from elevated raw material and energy costs. The company expects to continue outperforming industry growth, with select businesses growing at 2-3x the industry rate, driven by value-added products and increasing wallet share with key customers.

Therefore, we continue to recommend with Buy rating for the stock with a unchanged target price of ₹2,150.

Published on June 11, 2026

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