Axis Bank, the country’s third largest private sector lender, has cut its base rate by 10 basis points (bps) to 9.85 per cent. The new rates will be effective from June 30. Base rate is the benchmark rate to which all rates are linked.
In April, Axis Bank had cut the base rate by 20 bps from 10.15 per cent to 9.95 per cent. Prior to this, the lender had reduced its base rate by another 10 bps last October.
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This month several other lenders including State Bank of India, ICICI Bank, HDFC Bank, Allahabad Bank, Federal Bank, Central Bank and Punjab & Sind Bank, among others, have reduced base rates.
This move comes after the Reserve Bank of India (RBI) cut the key policy rate or the repo rate by 25 basis point earlier this month. Since January, RBI has cut the repo rate by a total of 75 basis points.
The regulator had said they expected full transmission of the rate cuts by banks to end customers. However, most banks have reduced base rate by 25-30 bps in response to RBI's rate cut of 75 bps.