Yes Bank raises lending rate 0.25%, FD rates by up to 0.5%
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Yes Bank raises lending rate 0.25%, FD rates by up to 0.5%

Last Updated: Wednesday, July 31, 2013, 13:35
 
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Yes Bank raises lending rate 0.25%, FD rates by up to 0.5%
New Delhi: Within a day of RBI's status-quo policy, private sector Yes Bank on Wednesday raised lending and deposit rates by up to 0.5 percent.

The bank revised upwards its base rate by 0.25 percent 10.75 percent effective August 1, Yes Bank said in a statement.

The bank also revised its fixed deposit rates by 0.25 percent to 0.5 percent in select tenors, it said.

The bank was the first to raise lending rate after RBI kept key policy rates unchanged.

Soon after RBI unveiled its first quarter review of monetary policy, many bankers had said that they may have no choice but to hike rates after a month to the detriment of retail borrowers and industry.

Weighed down by a weak rupee, the Reserve Bank on Tuesday chose to keep the repo rate or the rate at which RBI lends to the system, has been retained at 7.25 percent and the cash reserve ratio, the amount of deposits banks park with RBI, has been kept unchanged at 4 percent.

In order to contain rupee depreciation, RBI has taken slew of measures in the past couple of weeks resulting in the tight liquidity situation for the banks.

The decline of the rupee to a record low of 61.21 against the dollar on July 8 forced the RBI to take a series of unconventional measures to curtail liquidity and curb speculation.

On July 15, the Reserve Bank put in place measures to restore stability in the foreign exchange market, including raising the Marginal Standing Facility and bank rates to 10.25 percent and restricting access by way of repo window to Rs 75,000 crore.

The central bank also conducted open market sales of government securities of Rs 2,500 crore on July 18, the RBI review said.

As a contingency measure, the central bank opened a dedicated special repo window for a notified amount of Rs 25,000 crore for liquidity support to mutual funds that face redemption pressure.

On July 22, the RBI rationalised import of gold by making it incumbent on all nominated banks to ensure that at least one-fifth of the imported metal is exclusively made available for the purpose of exports.

A day later, the RBI directed banks to draw only 50 percent of their total deposits in overnight borrowings and maintain a 99 percent average cash reserve ratio everyday.

PTI




First Published: Wednesday, July 31, 2013, 13:31


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