HIGHLIGHTS-India central bank slashes rates to shore up growth

MUMBAI, Dec 6 (Reuters) - India's central bank slashed its key short-term interest rates and announced a host of other measures on Saturday aimed at keeping credit flowing and shoring up investor confidence to ward off an economic slowdown.

Following are the main measures announced by central bank governor Duvvuri Subbarao in Mumbai on Saturday. --------------------------------------------------------------- -- * Repo rate, or the central's key short-term lending rate, cut by 100 basis points to 6.5 percent, its lowest in 2-½ years, effective from Dec. 8.

* The reverse repo rate, the rate at which the central bank absorbs excess cash from the system, reduced to 5.0 percent from 6.0 percent, its lowest in more than three years, effective from Dec. 8.

* Central bank to provide refinance of 70 billion rupees ($1.4 billion) to Small Industries Development Bank of India to boost credit delivery to small-scale industries.

* Central bank is working on a similar refinance facility worth 40 billion rupees for the National Housing Bank. Details to be announced next week.

* Central bank to permit banks to consider applications for premature buyback of foreign currency convertible bonds from their customers, provided there is a minimum discount of 15 per cent on the book value of the convertible bonds. It will also consider applications for buybacks of such bonds out of rupee resources where there is a minimum discount of 25 percent on the book value.

* Loans granted by banks to housing finance companies to individuals may be classified under priority sector lending requirements, for loans up to 2 million rupees per house per family. Eligibility under this measure will be restricted to 5 percent of the individual bank's total priority sector lending.

* To extend exceptional/concessional treatment to commercial real estate exposures which are restructured up to June 30, 2009.

* As a one-time measure, the second restructuring done by banks of exposures, other than to commercial real estate, capital market, personal and consumer loans, up to June 30 2009 will also be eligible for exceptional regulatory treatment.

* The interest rate on post-shipment rupee export credit up to 180 days will not exceed benchmark prime lending rate minus 2.5 percentage points. ($1=49.7 rupees) (Reporting by Narayanan Somasundaram; Editing by John Mair)