The decision to cut interest rates on auto and consumer durable loans comes nearly a week after the government decided to pump in funds in PSU banks so that they can lower rates to stimulate demand in the targeted sector.
According to the country's largest bank, interest rate on car loan has been slashed by 0.20% to 10.55% against the earlier 10.75%.
"Processing charge has also been cut from 0.51% of the loan amount with a minimum of Rs. 1,020 to a flat rate of Rs. 500," it said.
The bank has also launched a special festival loan for its salary account holders for purchase of consumer durables and two-wheelers.
Attractive discounts are available under this offer resulting in effective interest rates starting from 12.05%, it said.
This 'Utsav Ki Umang SBI ke Sang' offer is valid from October 7, 2013, to January 31, 2014, and covers the purchase of cars, two-wheelers and consumer durables, it added.