The Reserve Bank has sent a strong message by reducing short-term rates by 100 basis points at which it lends and borrows from banks, but now it is upto the banks to do their part.

With key rates easing sharply, this time bankers may have no choice but to pass on the benefit to common citizen thus helping reduce the burden of EMIs. 

Most banks indicate that they are actively considering cutting rates. NDTV has learnt that the country's largest lender State Bank of India (SBI) will consider a 50-100 basis points cut in interest rates.

Similarly, leading private lender ICICI Bank, which has reduced rates for small home loans recently will also consider a 50-75 basis points cut in PLR.

HDFC too expects rates to drop once the cost of borrowing comes down. Some banks like Yes bank have already cut rates by 50 basis points and others are expected to follow.

Even if banks cut rates, the positive impact for consumers may be limited with EMIs expected to ease only marginally.

For instance, if you had taken a home loan of Rs 20 lakh for 15 years at a rate of 13 per cent, then your EMI currently would be roughly Rs 25,000.

Even if the rates come down by 1 per cent, then your EMI would come down only by Rs 1000 to Rs 24,000.

Apart from the cost of loans, banks also continue to remain reluctant to give new loans especially in sensitive sectors like personal loans and auto loans. However, bankers say that flow of credit should also ease up.

With the RBI stepping in so decisively, banks may not have a choice but to bring down the interest rates even the market demand points towards a low interest rate environment. So, finally there may be cheer for you and me towards the close of this year.