Home, consumer, corporate and personal loans are likely to become cheaper with the Reserve Bank cutting its key short-term repo rate by 1 per cent to 8 per cent, the first since 2004, bankers said.

"This is clearly an easing of monetary policy and will ensure the smooth functioning of financial markets to support growth," ICICI Bank's joint managing director Chanda Kochhar said.

Banks may take a relook at their interest rate structure in a little while, Corporation Bank's chairman and managing director, B Sambamurthy, told PTI.

Describing the RBI's move as 'being in line with the various recent measures taken,' Sambamurthy said that the liquidity problem has now been addressed.

Text: PTI & Agencies

Image: A ticker on the facade of the Bombay Stock Exchange shows Sensex. | Photograph: Indranil Mukherjee/AFP/Getty Images

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