Mumbai, Aug. 8: Private sector lender Axis Bank today reduced its interest rate on savings bank accounts by 50 basis points to 3.5 per cent for deposits up to Rs 50 lakh.

However, the bank will continue to pay 4 per cent interest on deposits above Rs 50 lakh.

Axis Bank is the fourth lender to reduce the interest rate after market leader State Bank of India (SBI) begun the process of reducing interest rate on savings bank account.

"The bank has revised the interest rate downward on savings account balance by 50 bps to 3.50 per cent per annum on balance of up to Rs 50 lakh," Axis Bank said in a regulatory filing.

The new interest rates will be effective from today, it added. On July 31, the SBI slashed the interest rate on savings account deposits by 50 basis points to 3.5 per cent on balance of Rs 1 crore and below.

Axis Bank shares closed at Rs 499.30 apiece on the BSE, down 1.32 per cent.

Another PSU lender Bank of Baroda had cut the rate to 3.5 per cent on deposits of up to Rs 50 lakh. Karnataka Bank too had tweaked the interest rate on savings bank accounts.

HDFC Bank move

At a time a majority of lenders are going slow on corporate loans, HDFC Bank today said it was looking at increasing its market share in the segment .

"We are also optimistic about increasing market share. Thanks to our strong asset quality, we do not face capital constraints unlike a large part of the banking system," the bank's executive director Kaizad Bharucha said.

He said the second largest private sector lender would not let go of its prudent philosophy.