The country's second largest private sector bank, HDFC Bank, has decided to revise interest rates from today onwards. The lender reduced its benchmark prime lending rate (BPLR) by 25 basis points to 15.75 per cent, turning the loans cheaper for customers. The bank, a week ago, had slashed interest rates on fix deposits of different maturities.

HDFC has reduced benchmark lending rate by 75 basis points during last six months. The latest move came amid reduced fund costs in recent times, due to low demand across all sectors of the economy.

The country's largest private sector bank, ICICI Bank, had also slashed interest rates on retail loans by 50 basis points in past months - a move that helped all existing retail loan customers of the bank. The bank has also reduced its benchmark advance rate (I-BAR) from 16.25 per cent to 15.75 per cent.

The largest public sector bank, SBI, has also cut its benchmark prime lending rates by 50 basis points to 11.75 per cent, given the reduced fund costs.

Meanwhile, the Reserve Bank of India is set to bring more transparency in the fixation of interest rates, constituting a special six-member working group to review and suggest more effective mechanism for the system.