The state owned banks has finally announced special relief measures for home loan buyers and small scale enterprises (SME) after deliberations of more than a week. All 28 state-owned banks have revised home loan interest rates at 9.25% below Rs 20 lakh and
8.5% for loans up to Rs 5 lakh.

The move would prove helpful to lower and middle-income class besides increasing demand in the reality sector. Reality sector is facing the heat of global slowdown with significant decline in growth rate.

Banks would also provide free life insurance cover and waive processing and prepayment charges. In another significant decision, the margin money required to get loan is also reduced to just 10 per cent for the loans of Rs 5 lakh and below. The chairman of State Bank of India, OP Bhatt said that Public Sector Banks would disburse between Rs 15,000 crore and Rs 20,000 crore of home loans under new announcement. Meanwhile, private sector banks have not announced such measures yet.

Small and medium enterprises have also reason to cheer as they can get loan at cheep interest rates from state-owned banks. Interest rates for micro industries have been cut by 100 basis points while small and medium enterprises can enjoy 50 basic point reductions in interest rates.

However, SMEs demanded more measures from the government to mitigate impact of slowdown. The secretary general of Indian Small and medium Scale Enterprises, Ajay Bharadwaj said, "We were expecting a 2 percentage point cut. This is a step in isolation and will not have a positive impact. We need interventions at many ends."