The State Bank of India has cut interest rates on home and auto loans by 0.25 to 1.5 per cent even as the bank has introduced new tenure brackets in housing segment effective from Wednesday to grow faster in the highly competitive retail sector.

"The revised floating rate for home loans of upto five years is 7.75 per cent (8 per cent earlier)", a senior SBI official told PTI in Mumbai on Tuesday.

SBI has done away with the bracket of 5-10 years and introduced new brackets of 5-15 years and 15-20 years, he said.

The rate for 5-15 years would be 8.25 per cent (8.75 per cent) while that for 15-20 years has been revised to 8.5 per cent (9.25 per cent), he said.

SBI official said the interest rate on fixed basis would be higher by 0.25 per cent than those offered on floating.

The interest rates on auto loans have been reduced from 11 per cent to 9.5 per cent for a tenure of upto three years and 10 per cent for three to seven years, he said.

The country's largest bank has a tie up with Maruti Udyog, Tata Motors, Bajaj Auto and TVS Motor Company.

He said the housing loan portfolio has grown by Rs 1,521 crore (Rs 15.21 billion) in the five months of the current fiscal while the total personal banking advances have increased by Rs 2,400 crore (Rs 24 billion).

Last month, SBI decided to provide fixed rate home loan customers, who were paying higher interest, an one time option to switch over to the prevailing fixed or floating rates. This scheme was available till December 31, 2003.