Term Auction Deposits (TAD)

Term Auction Deposits (TAD) are conducted whenever the Central Bank is mopping up excess liquidity from the domestic market. A TAD is a monetary policy instrument through which the Central Bank invites commercial banks to place deposits with it for a specified period through an auction process. By taking in these deposits, the Central Bank temporarily withdraws excess money from circulation, helping to manage liquidity levels in the banking system. The TAD rate is the interest paid by the Central Bank to commercial banks for placing their funds with the Central Bank for the agreed tenor.