Cashing in on the deregulated saving interest rate regime, private sector lender, Yes Bank has again raised domestic savings deposit rates, to 7 per cent from 6 per cent with immediate effect on December 22, 2011.
The bank has also raised non-resident Indian savings account deposit rate to 6 per cent, up 200 basis points, for deposits up to Rs 1 lakh, while the deposits above rupees one lakh would fetch 7 per cent after the hike.
RBI had, on October 25, 2011, deregulated savings deposit rates, its last administered bank rate, following which Yes Bank, on the same day had raised such rates to 6 per cent from 4 per cent.
The move is expected to attract more savings into the banking system, considering the volatility and uncertainty in the riskier assets like equity markets. Also it would help banks to reduce dependence on central bank for overnight borrowings, which is costlier as banks have to pay 8.5 per cent interest to RBI on such borrowings, under the repo window.
Dion Global Solutions Ltd