New Delhi: Canara Bank has joined the growing list of lenders adjusting interest rates after the Reserve Bank of India’s recent policy move. Following the RBI’s 25 basis point cut in the repo rate earlier this month, the public sector bank has revised both its lending rates and fixed deposit interest rates. The decision comes after major banks like State Bank of India (SBI) and HDFC Bank had already announced similar reductions.
RBI repo rate cut leads to lower lending rates
In its Monetary Policy Committee (MPC) meeting held in the first week of December 2025, the Reserve Bank of India reduced the repo rate by 25 basis points, bringing it down from 5.50 per cent to 5.25 per cent. Following this move, the public sector bank has cut its Repo Linked Lending Rate (RLLR) from 8.25 per cent to 8.00 per cent. The revised rate has come into effect from December 12 and directly reflects the RBI’s latest policy decision.
Lower RLLR to bring relief for borrowers
With the reduction in the RLLR, borrowers whose loans are linked to the repo rate can expect some relief. Depending on the terms of their loan agreements, the cut may lead to lower EMIs or a shorter loan tenure. Repo-linked loans generally ensure quicker transmission of RBI policy rate changes, allowing customers to benefit faster from such reductions.
Other banks also adjust rates after RBI move
Canara Bank’s decision is part of a wider trend across the banking sector following the RBI’s policy easing. In recent days, HDFC Bank has lowered interest rates on select fixed deposit tenures, while State Bank of India (SBI) has revised both its lending and deposit rates in line with the repo rate cut.
HDFC Bank has reduced interest rates on fixed deposits (FDs) for deposits of less than Rs 3 crore, impacting retail and small investors.
FD rates cut across select tenures
For fixed deposits with a tenure of 18 months to less than 21 months, HDFC Bank has reduced interest rates by 15 basis points. After the revision, general customers will earn 6.45 per cent per annum, down from 6.6 per cent, while senior citizens will now get 6.95 per cent per annum instead of 7.1 per cent. The bank has also revised interest rates on other FD tenures ranging from seven days to ten years, with rates now ranging between 2.75 per cent and 6.40 per cent, depending on the deposit period and customer category.
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