In a big relief to home and auto loan borrowers, several banks led by market leader SBI today slashed lending rates by up to 0.3 percent after RBI cut key policy rate.

Yielding to demands of Finance Minister Arun Jaitley and India Inc, RBI Governor Raghuram Rajan "front loaded" the repo rate cut despite worries of below normal monsoon and its impact on prices.
    
The Governor asked banks to follow suit and pass on the rate cuts -- 0.75 percent since January -- to individual and corporate borrowers.
    
Most bankers felt that with today's rate cut RBI has provided space for lowering lending and deposit rates. Public sector Allahabad Bank became the first to reduce the lending rate by 0.3 percent.
    
RBI cut the repo rate (short-term lending rate) from 7.5 percent to 7.25, but left all other policy tools like cash reserve requirement unchanged at 4 per cent and Statutory Liquidity Ratio (SLR) at 21.5 percent.

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