Mumbai: Axis Bank, the third largest private sector lender, on Tuesday announced a cut in its lending rate by 0.15 percent to bring it at par with its larger rivals.
Announcing its maiden MCLR (Marginal Cost Lending Rate) on March 31, the bank had set the overnight rate at 9.10 percent, which will be reduced to 8.95 percent effective April 18, the lender said in a statement today.
At present, SBI and HDFC Bank have their overnight MCLRs, which should be reviewed once a month, at 8.95 percent.
This is the first review introduced by a lender since the introduction of the MCLR with effect from April 1 to ensure effective transmission of policy rates.
Axis Bank Managing Director and CEO Shikha Sharma said, "The MCLR mechanism is expected to ensure more effective transmission of changes in monetary policy rates for new borrowings. This is illustrated by our reduction in MCLRs as soon as market rates reduced."
The bank has also reduced its rates for one-month period to 9.05 percent from 9.20 percent and for three months to 9.25 percent from the earlier 9.40 percent. The three-year rate has been reduced to 9.50 percent from 9.65 percent.
The Ahmedabad-headquartered bank has also reduced its base rate by 0.05 percent to 9.45 percent.