State Bank of India, the country's largest lender by assets, Monday cut interest rates on education loans in the first such move by a local bank after the central bank said the interest rate cycle has peaked.

Loans of up to 400,000 rupees will now be charged an interest rate of 13.50%, down from 13.75% earlier, while those between 400,000 rupees and 750,000 rupees will be charged 13.25%, instead of 14.25% earlier, the bank said in a release.

Loans above 750,000 rupees will be given at an interest rate of 12.00%, a quarter percentage point less than earlier.

The reduction comes as the Reserve Bank of India, in its last money policy, hinted at monetary easing in the coming days.

State Bank Chairman Pratip Chaudhuri, speaking at the bank's post-earning press conference earlier this month, said the lender could look at cutting interest rates in certain category of loans, including education loans.