SBI has introduced a 25 basis points extra rate cut on home loan up to Rs 20 lakh. Earlier, there was no such provision.

For auto loans too, SBI has slashed its rate quite substantially. On a car loan of 5 to 7 years, the interest rates have been brought down by 75 basis points to 11.50%. Similarly, during the festival season, auto loans of three-five years would come at 11.25%, compared to 12% earlier.

n loan of over Rs 7.5 lakh for a period up to three years, the interest rates have been slashed by 50 basis points to 11%. And, loans less than Rs 7.5 lakh for the same period will now cost 11.25%.

Personal loans are also cheaper by 0.50 to 1 percentage point. Besides, the bank is also offering 50% concession in processing charges on all the personal loans.

There is good news for small road transport operators too with rates lowered by one to two percentage points.

Auto firms and real estate developers, who were complaining of losing business, can also rejoice. While twowheeler manufacturers had seen a dip in sales, car makers had seen growth rates dip.

SBI's announcement comes days after finance minister P Chidambaram met bankers and auto companies to find out if the rise in interest rates over the last couple of years had affected growth. RBI had to step in on a number of occasions to raise interest rates to ensure that inflation, which had shot up to over 6.5% in January, was moderated.

The move is also expected to help SBI improve credit flow since growth rate had fallen to around 10% during the first half of the current financial year.