State Bank of India surprised the markets with a cut of only 0.05 percentage point in its Base Rate on Wednesday from 9.75 per cent to 9.70 per cent with effect from February 4.

SBI cut rates following a 25 basis point cut in policy rate (repo) by the Reserve Bank of India on Tuesday in its third quarter review of monetary policy from 8 per cent to 7.75 per cent. The RBI has also cut Cash Reserve Ratio by 25 basis points from 4.25 per cent to 4 per cent to cushion the rate cut helping banks to transmit the rate cut to customers immediately.

HDFC Bank reduced its auto loan rates by up to 0.5 percentage point. The interest rate on car loans will be lower by 0.25 percentage point ranging from 10.50 per cent to 11.50 per cent (from 10.75 per cent to 11.75 per cent). The new rates would be effective from February 1.

In the two-wheeler segment, loans will be cheaper by 0.5 percentage point. The bank reduced the interest rate on commercial vehicle loans by 0.25 percentage point. With regard to commercial vehicles, rates for heavy commercial vehicles loans will be down to 11 per cent, while that on light commercial vehicles to 13.75 per cent from 14 per cent.

Among the old private sector banks, Federal Bank slashed its interest rates on auto loans to 10.45 per cent from 11.20 per cent.

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