YES Bank has cut saving bank interest rate by 100 basis points (one per cent) to five per cent for account balances with less than Rs 1 lakh. For balances of Rs 1 crore and above, the new rate will be 6.25 per cent, down from 6.5 per cent. The new rates on balances in savings deposits would be effective from September 1, 2017, it said in a statement.
The bank has kept interest rates of 6 per cent unchanged for deposits of over Rs 1 lakh and less than Rs 1 crore.
State Bank of India was the first to reduce interest rate on balances in savings bank accounts. Only July 31, the country’s largest lender had reduced the interest rate on amounts up to Rs 1 crore by 0.5 per cent to 3.5 per cent.
SBI, however, will continue to pay 4 per cent interest on savings bank accounts with deposits of above Rs 1 crore. Bank of Baroda had also reduced rate on savings deposits.
For YES Bank, the share of low-cost deposits (current account and savings account) stood at 36.8 per cent at the end of June 2017, reflecting an increase of 7.2 per cent when compared with last year. Its net interest margin stood at 3.7 per cent at the end of June 2017. Soon after the RBI cut repo rate by 25 basis points to 6 per cent on August 2, Rana Kapoor, managing director of YES Bank, had said there was room for incremental rate cuts to the tune of 50-75 bps in coming months.