Axis Bank Ltd has cut fixed deposit rates by up to 0.25% across various maturities. Axis Bank is one of the first major lenders to slash its deposit offering after the Reserve Bank of India's (RBI) repo cut a fortnight back.
The third largest private sector lender has cut its deposit rate offerings by 0.25% across buckets in the 18 to 36 months window, a bank official said on Thursday.
Similarly, for deposits up to 18 months, the rates have been decreased by 0.15% to 8.50%. The deposit rate cuts, which generally precede a lending rate cut, are on retail deposits under Rs.1 crore and effective from 11 March 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%.
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% cut in January, and followed it up with a similar move on 4 March, 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%.
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% on bulk deposits between Rs.1 crore and Rs.5 crore.