After SBI and HDFC, Axis Bank lowers lending rate by 15 bps to 8.95%

Axis Bank, the third largest private sector lender, on Tuesday announced a cut in its lending rate by 0.15% 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%, which will be reduced to 8.95% effective April 18, the lender said in a statement on TUesday.

At present, SBI and HDFC Bank have their overnight MCLRs, which should be reviewed once a month, at 8.95%.

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% from 9.20% and for three months to 9.25% from the earlier 9.40%. The three-year rate has been reduced to 9.50% from 9.65%.

The Ahmedabad-headquartered bank has also reduced its base rate by 0.05% to 9.45%.