The Reserve Bank of India Governor Raghuram Rajan.Reuters

In a move that could bring relief to borrowers, the Reserve Bank of India (RBI) on Thursday cut its main lending rate (repo rate) by 0.25 per cent.

As a result of this move, RBI's main lending rate will now be down to 7.75 per cent from 8 per cent, reports NDTV.

The move was on the cards with food prices remaining in check and a near 60 percent fall in global oil prices since last June. "Since July 2014, inflationary pressures (measured by changes in the consumer price index) have been easing. These developments have provided headroom for a shift in the monetary policy stance," RBI governor Raghuram Rajan said in a statement, adding that inflation was likely to be below 6 per cent by January 2016.

Former chairman of State Bank of India Pratip Choudhuri said banks were expected to lower their lending rates by 0.25 per cent following the RBI rate cut.

Meanwhile, the markets soared after news of the rate cut. The Sensex was up by 450 points and the bank stocks also skyrocketed.