Yes Bank cuts base lending rate for this first time this year

Yes Bank, India's fifth largest private sector lender, today cut its base lending rate by 25 basis points to 10.50%.

Base rate has been cut from 10.75% to 10.50%, Yes Bank said in a regulatory filing to the stock exchanges.

"The revised rates will be effective from June 22, 2015," it said.

The reduction, the bank said, was a consequence of the recent term deposit rate cuts of up to 25 basis points it had carried out across various tenors that were made effective from June 17, 2015. 

This is the first rate cut by Mumbai-based Yes Bank and comes after three rounds of key policy rate reductions by the Reserve Bank -- 0.75% in all so far this year.

Bigger lenders like HDFC Bank and State Bank of India have effected two rounds of rate cuts since April, when the bankers were chided by Governor Raghuram Rajan for not passing the rate cuts to borrowers.

Yes Bank's rate is still higher than the aggressive posturing by its rivals in the market, where offerings start from 9.70 per cent.

Ahead of a recent meeting with Finance Minister Arun Jaitley, Yes Bank's chief executive and managing director Rana Kapoor had hinted of there being a possibility of a 0.25% cut in lending rates.

The RBI and the Finance Ministry want banks to cut rates for better transmission of the policy actions and to help boost the economic growth recovery, respectively.