State Bank of India, the country's largest lender, on Wednesday cut its base rate - the floor lending rate - by 0.05 percentage points to 9.70% setting the stage for cheaper home, corporate and auto loans.
Base rate serves as the minimum rate for all loans and a fall in it triggers an interest rate cut in most categories of loans.
HDFC Bank also reduced its auto loan rates by 0.50 percentage points. Its car loans will now be in the range of 10.5%-11.5%. Federal Bank also slashed interest on car loans by up to 1.25 percentage points to 10.45%.
The decisions came a day after the RBI reduced the repo rate by 0.25 percentage points.