Axis Bank, country's third largest private sector lender, on Wednesday followed others in the system by cutting its base rate or the minimum rate of lending by 0.35 per cent to 9.50 per cent.
"Axis Bank has revised its base rate from 9.85 per cent to 9.50 per cent per annum with effect from October 5," the bank said in a statement.
This is third rate cut by the Shikha Sharma-led bank this fiscal, following a 0.20 per cent cut in April and a 0.10 per cent cut in June.
The move comes a day after the RBI's monetary policy announcement, where governor Raghuram Rajan cut its key rates by 0.50 per cent, leading to a rush of base rate revisions by banks, led by State Bank of India.
SBI announced a 0.40 per cent cut in lending rate to 9.30 per cent, which is the most competitive in the market at present.
State-run Bank of India cut its base rate by 0.25 per cent to 9.70 per cent, its peer Andhra Bank cut it by a similar measure of 0.25 per cent.
Bankers were almost unanimous in saying that borrowers should expect cut in lending rates following the RBI move.
Soon after the RBI policy announcement, finance minister Arun Jaitley had expressed hope that banks will transmit the benefit to borrowers so as to boost investments as well as the economy.