Under the revised rates, effective September 1, the bank's one-year MCLR will come down to 8.55 percent, while the overnight MCLR will be 8.30 percent.
The one-year MCLR is considered important from a retail loans perspective, as all of a bank's long-term loans like home loans, are linked to this rate.
Its larger rival HDFC Bank's one-year MCLR stands at 8.60 percent as of now, while the same for third largest private sector lender Axis Bank is at 8.55 percent.
ICICI Bank had last reviewed its interest rates in the first week of July, when it effected a 0.05 percent reduction.
It can be noted that the RBI has been disappointed with banks for not passing on the lower rates to borrowers, despite its four successive rate cuts of 1.10 percent in 2019 and 0.85 per cent since April.
According to RBI, banks have passed on only under 0.30 percent benefits to borrowers till August as against 0.75 percent of its cuts. Banks say it takes time for its liabilities to get re-priced which results in the delay in the transmission of RBI's moves.
The RBI has suggested linking of loan rates to external benchmarks like its repo rate as an alternative to take care of its concerns. The state-run lenders have responded to this call, but the private sector ones are yet to move.