The State Bank of India (SBI), the country's largest state-owned lender, on Wednesday slashed interest rates as well as processing fee for auto loans, and announced the launch of consumer loan products for salaried employees.

The stated-owned lender announced that it would now charge an interest rate of 10.55 per cent, down 0.20 percentage points from the previous interest rate of 10.75 per cent.

The lender also slashed processing fee to a flat rate of Rs 500.

Announcing the move, SBI said in a statement, "Processing charge has also been cut from 0.51% of the loan amount with a minimum of Rs. 1,020 to a flat rate of Rs. 500."

In addition, SBI announced the launch of a special festival loan scheme for its salaried employees to provide them with more attractive, affordable loans to buy consumer durables and two-wheelers during the imminent festive season.

SBI is not the only lender that has slashed its interest rate to woo customers ahead of the festive season. Dena Bank, Oriental Bank of Commerce (OBC), Punjab National Bank and IDBI Bank, also announced cuts in their respective interest rates.