The Reserve Bank of India has cut a key interest rate to boost the economy, which is slowing in the face of the global recession.
The repo rate - in which the bank injects short-term money into the banking system - was cut by a quarter percentage point to 4.75%.
The move came as the bank said it expected economic growth to slow to 6% in the current financial year.
This is down from a revised 6.5% for the 12 months to 31 March.
The BBC reports the RBI has now cut the repo rate six times since last October in attempt to boost the economy.
It reiterated a call for the commercial banks to pass on the cuts to customers.
Analysts said the reduction was largely expected.
