Axis Bank has cut fixed deposit rates by up to 0.25 per cent across various maturities.
Axis Bank is one of the first major lenders to slash its deposit offering after RBI’s repo cut a fortnight back.
The third largest private sector lender has cut its deposit rate offerings by 0.25 per cent across buckets in the 18 to 36 months window, a bank official said today.
Similarly, for deposits up to 18 months, the rates have been decreased by 0.15 per cent to 8.50 per cent.
The deposit rate cuts, which generally precede a lending rate cut, are on retail deposits under Rs 1 crore and effective from March 11 this year.
With easing liquidity conditions and the low credit offtake, Axis Bank was among the few which cut its base rate or the minimum rate of lending in October last year by 0.10 per cent.
It can be noted that the RBI indicated a shift in its stance after getting a grip over inflation and delivered a surprising 0.25 per cent cut in January, and followed it up with a similar move on March 4, indicating its comfort with the budget announcements.
Following these moves, the repo rate at which the central bank lends to the system, currently stands at 7.75 per cent.
While banks claim the policy moves generally take time to get transmitted into actual lending rates, the RBI has been unhappy with the banks for not passing the benefits of the rate cuts to the borrowers.
The country’s largest lender, State Bank of India, has indicated that it would be very difficult to have a cut in lending rates till the end of March, which is generally the busy season for credit offtake.
Earlier this month Axis’ rival HDFC Bank reduced its deposit rate offering by 0.25 per cent on bulk deposits between Rs 1 crore and Rs 5 crore.