Canara Bank has announced revisions to both its lending and fixed deposit (FD) interest rates in response to the Reserve Bank of India’s recent decision to cut the repo rate by 25 basis points. The move follows similar rate adjustments by other major lenders as part of efforts to pass on the benefits of monetary easing to customers.

Key Highlights

• Canara Bank cuts lending rates following RBI’s repo reduction, easing borrowing costs for customers.
• Fixed deposit interest rates revised, impacting returns for savers amid softer rate environment.

Under the updated structure, Canara Bank has lowered key lending rates, including those linked to the repo-linked lending rate (RLLR) and other benchmarked loan products. As a result, borrowers with home loans, personal loans, and other floating-rate credit facilities are likely to see reduced Equated Monthly Installments (EMIs) or have the option to shorten their loan tenures, offering relief amid broader economic pressures.

At the same time, the bank has adjusted its FD interest rate schedule, which will influence returns for savers and depositors. While rate reductions on deposits typically mean lower returns on new FDs, these changes reflect the impact of the central bank’s monetary policy aimed at stimulating economic activity by making borrowing more affordable.

Canara Bank’s decision aligns with a wider industry trend: several public sector banks, including State Bank of India and Punjab National Bank, have trimmed lending costs following the RBI’s policy move to support credit growth. This coordinated response is expected to ease financing costs for borrowers across various segments while reshaping the interest rate environment for both borrowers and investors.

Also Read: SBI Cuts Lending Rates, Home Loans Set to Become Cheaper

Canara Bank has outlined revised interest rates across its term deposit tenures for both general customers and senior citizens. For deposits with maturities ranging from 7 to 45 days, the interest rate stands at 3% per annum for both categories. Deposits of 46 to 90 days offer 4%, while tenures between 91 and 179 days earn 4.25% annually. For deposits held between 180 and 269 days, the rate is 5.25% for the general public and 5.75% for senior citizens. Deposits ranging from 270 days to less than one year carry interest of 5.5% for general customers and 6% for senior citizens. For tenures of one year to one year and three months, the rates are 5.9% and 6.4%, respectively. Special tenures include 444-day deposits offering 6% to general customers and 6.5% to senior citizens, and 555-day deposits providing 6.15% and 6.65%, respectively. Deposits above one year and three months but less than two years also earn 5.9% for general customers and 6.4% for senior citizens.

In addition, the bank has revised its Marginal Cost of Funds-based Lending Rates (MCLR) across tenors. The overnight MCLR is set at 7.90%, while the one-month MCLR stands at 7.95%. The three-month MCLR has been fixed at 8.15%, followed by 8.50% for the six-month tenor. The one-year MCLR, which is commonly used to price retail loans, is set at 8.70%, while the two-year and three-year MCLRs stand at 8.85% and 8.90%, respectively.