Amidst expectations of rates hike in 2010, a few Indian Corporates may issue bonds this week and no immediate requirements may keep banks away from issuing such bonds.

"The corporates might come in as the view is rates will rise next month, so they will want to raise money as soon as possible, but the banks will probably not come as yields have hardened plus they have already raised most of their requirements," said an official at a private sector bank.

Most leading government owned banks and private banks had raised capital via Tier-I and Tier-II bonds in November end and early December to meet the capital adequacy ratio ahead of the end of December Quarter. However, banks are still in need of short term funds in order to meet asset-liability mismatches ahead of the quarter end.

CD (Certificate of deposit) issues have been comparatively high despite yields at a six month peak. Banks have garnered nearly Rs. 213 billion via CDs so far in this month as against 132 billion in November.

ONGC Videsh (OVL), the overseas arm of Oil and Natural Gas Corp, opened bidding for up to Rs 24 billion of bonds on Monday. Real estate player Housing Development & Infrastructure Ltd on Friday said that it planned to sell Rs 11.5 billion of bonds. Bharat Petroleum Corp is also expected to sell bonds.

RBI is likely to raise interest rate earlier than expected in order to contain inflation. Soaring food prices have raised concerns amongst analysts who feel that RBI may increase the rates by around 25 basis points.