The country's second-largest bank, ICICI bank has announced to reduce interest rates on loans by 50 basis points in its second rate revision during the last six weeks. The revised rates would be applicable for new as well as existing borrowers of the bank. The move came amid anticipations of further interest rate cut by the public sector lender, the State Bank of India. ICICI Bank CEO, Chanda Kochhar, said: "In the retail segment, we are seeing a change in sentiments.

Customers seem to be in a mood to purchase homes." The bank would now offer loans upto Rs 30 lakh at 9.25%, still higher than interest rate offered by HDFC. Earlier, ICICI bank offered loan at interest rate of 9.75%, 10% and 11.5% for amount upto Rs 20 lakh, Rs 20-30 lakh and Rs 30 lakh respectively.

Earlier, on May 7, another private lender HDFC bank also reduced the benchmark prime lending rate (PLR) by 25 basis points, forcing other lenders to follow the suit. It also offered reduction in interest rates for new borrowers, availing loan between Rs 30 lakh to Rs 1 crore.

Chairman and Managing Director of Bank of India, SA Bhat said: "If RBI allows separate PLR for fresh loans, then we will reduce rates immediately."