Mumbai: Axis Bank, India’s third largest private sector lender, on Tuesday announced a cut in its lending rate by 0.15 per cent to bring it at par with its larger rivals.
Announcing its maiden marginal cost lending rate or MCLR on March 31, the bank had set the overnight rate at 9.10 per cent, which will be reduced to 8.95 per cent effective April 18, the lender said in a statement on Tuesday.
At present, State Bank of India (SBI) and HDFC Bank have their overnight MCLRs, which should be reviewed once a month, at 8.95 per cent.
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.
“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,” Axis Bank managing director and CEO Shikha Sharma said.
The bank has also reduced its rates for one-month period to 9.05 per cent from 9.20 per cent and for three months to 9.25 per cent from the earlier 9.40 per cent. The three-year rate has been reduced to 9.50 per cent from 9.65 per cent.
The Ahmedabad-headquartered bank has also reduced its base rate by 0.05 per cent to 9.45 per cent.