Loans from these 7 banks to get cheaper

While the base rate cut so far has come mostly from public sector lenders except Axis Bank, other private peers are expected to follow suit soon.

State-run lenders Punjab National Bank, Bank of Baroda and Oriental Bank of Commerce have trimmed their base or minimum lending rates by up to 0.40 per cent in response to RBI's policy rate cut.

Punjab National Bank (PNB) cut the base rate by 0.40 per cent, Bank of Baroda (BoB) by 0.25 per cent, while Oriental Bank of Commerce (OBC) slashed the rate by 0.20 per cent.

"Base rate cut by 40 bps from 10 per cent to 9.60 per cent from October 1," PNB said in a statement.

In a BSE filing BoB said it has decided "to reduce base rate by 25 basis points from 9.90 per cent per annum to 9.65 per cent."

It also reduced the Benchmark Prime Lending Rate (BPLR) by 25 basis points (or 0.25 per cent) from 14.15 per cent to 13.90 per cent.

The reduction in both the rates will be effective from October 5, the lender added.

"Oriental Bank of Commerce has slashed its base rate by 20 basis points from 9.90 per cent per annum to 9.70 per cent with effect from September 30, 2015," it said in a filing.

State-run IDBI Bank cut its base rate by 0.25 per cent to 9.75 per cent.

The new base rate will be effective from October 5. "The reduction in interest rate is expected to positively encourage loan growth, both in the retail consumer segment, as also revitalise fixed capital formation through higher corporate sector lending, thereby supporting the growth impulses in the economy," the bank said in a statement.

Earlier today, Axis Bank -- first among private lenders after RBI's policy announcement on Tuesday-- announced a cut of 0.35 per cent in base rate to 9.50 per cent.

The base rate is the minimum rate of interest at which a bank can lend to its borrowers.

Country's largest lender State Bank of India, Andhra Bank and Bank of India were among the first to cut base rate on Tuesday in the range of 0.20-0.40 per cent in response to RBI's repo rate cut of 50 basis points to  6.75 per cent.

While the base rate cut so far has come mostly from public sector lenders except Axis Bank, other private peers are expected to follow suit soon.

Soon after the RBI announcement, Finance Minister Arun Jaitley yesterday expressed hope that banks will transmit the benefit to borrowers to boost investments and the economy.

"We are looking forward now to the transmission of these cuts which will effectively help to boost confidence and investment. They will also help to realise the economy's medium term potential growth rate," Jaitley had said.