Country’s third-largest private sector lender Axis Bank on Wednesday cut its base rate or the minimum rate of lending by 0.20 per cent to 9.95 per cent, following its larger peers who also cut their offerings after Reserve Bank Governor Raghuram Rajan’s hard talk.
“Axis Bank has revised its base rate from 10.15 per cent per annum to 9.95 per cent per annum,” a bank statement said, adding that the cut is effective from April 13.
The Shikha Sharma-led bank has also cut its deposit rate offerings by 0.25 per cent across multiple maturities, a senior official of the bank said.
After leaving the key rates unchanged yesterday, Rajan used strong words against the banks for not passing the benefits of RBI’s twin rate cuts to borrowers and maintaining rates at a higher level.
He termed arguments of cost of funds for the lenders being high as “nonsense” and hoped that banks will fall in line. At the customary post-policy interaction with reporters, bankers had said that the base rate is a function of the deposit rates and will be cut once they go down.
However, within hours, banks led by the country’s largest lender SBI and two biggest private sector lenders — ICICI Bank and HDFC Bank — responded immediately with cuts of up to 0.25 per cent in their base rates.