Axis Bank reduces its base rate by 35 basis points to 9.50%

Axis Bank revised its base rate from 9.85% to 9.50% and the revised rate will be effective from October 5.

This year, the bank had cut its base rate by 10 bps to 9.85%, which was effective June 30; and by 20 bps to 9.95%, effective April 13.

Meanwhile, the effective rate applicable to various fund-based credit and credit limits, which are linked to the Axis Bank’s base rate, will reduce by 35 basis points.

The news comes after Governor of Reserve Bank of India (RBI) Raghuram Rajan cut repo rates by 50 basis points to 6.75% and kept the Cash Reserve Ratio constant at 4%.

READ ALSO: Raghuram Rajan’s reasons for the huge, unexpected rate cuts

Rajan had said the impediments for banks to pass on rate cuts were removed but not much was transmitted by the banks.

"There are various impediments to transmission. They add to the lag, even when transmitted monetary policy takes time to work. It could take a long time when not active. Ask the government about what it wants to do about transmission. We intend to have enough liquidity in the market, to supply what is needed in the markets right now,” he had said.

Other lenders like State Bank of India, Andhra Bank have also reduced the base rates. It is likely that more banks will follow the suit.