Home, vehicle loans: Canara Bank and Indian Bank latest to adjust lending rates post RBI repo rate cut
Canara Bank and Indian Bank have reduced their lending rates following RBI's decision to cut the repo rate. This move aims to ease the financial burden on borrowers and stimulate credit accessibility by decreasing EMIs for housing and vehicle loans.


- Apr 24, 2025,
- Updated Apr 24, 2025 7:09 PM IST
Canara Bank and Indian Bank have announced reductions in their lending rates, a decision influenced by the Reserve Bank of India's (RBI) recent cut in the repo rate from 6.25% to 6.00%. This adjustment by the banks is intended to pass on the benefits of the lowered repo rate to customers, making loans more affordable. Canara Bank has implemented a 25 basis points reduction in its Repo Linked Lending Rate (RLLR), effective from 12th April 2025. Consequently, the interest rates for housing loans now start at 7.90% per annum, and vehicle loans begin at 8.20% per annum.
Canara Bank said: "With the RLLR reduction, the minimum rate of interest for all the loans have been lowered out of which, the popular loan products are: 🏠 Housing Loans – Now starting at 7.90% p.a. 🚗 Vehicle Loans – Now starting at 8.20% p.a. This means lower EMIs for existing and new borrowers and enhanced affordability for customers planning to purchase a house or vehicle."
In a similar move, Indian Bank has lowered its home loan rates from 8.15% to 7.90% per annum and vehicle loan rates from 8.50% to 8.25% per annum. These rate cuts are designed to provide financial relief by reducing EMIs, thereby making borrowing more accessible. Additionally, Indian Bank is offering incentives such as discounted processing fees and no documentation charges, enhancing the overall appeal of their loan products.
The Repo-Linked Lending Rate (RLLR) is the rate at which banks provide loans to customers, determined by the repo rate established by the RBI. The concept of "repo-linked lending rate" denotes an interest rate connected to the repo rate. As per an RBI circular distributed in October 2019, banks are required to tie their retail loans to external benchmark lending rates, known as E-BLR. Consequently, the repo rate has emerged as the standard benchmark for the majority of banks.
Other banks
The State Bank of India, the largest public sector bank in the country, has recently reduced its lending rates by up to 0.25%. Starting April 15, 2025, the bank's EBLR (External Benchmark Based Lending Rate) has been adjusted from 8.90% to 8.65%. Similarly, Punjab National Bank has also decreased its RLLR from 8.90% to 8.65%. Despite these changes, the Bank Spread (BSP) of 0.20% remains unaffected. Consequently, the final lending rate offered to customers has been lowered from 9.10% to 8.85%. Bank of India has aligned its lending rates with the Reserve Bank of India's 25 basis points repo rate cut. The bank's RBLR has been reduced from 9.1% to 8.85%, with the updated rate taking effect on April 9, 2025. In a BSE filing, Bank of India stated, "Effective April 9, 2025, the RBLR has been decreased by 25 basis points from 9.1% to 8.85%."
Rep rate cut
The adjustments by these banks align with their strategic goal to support customer needs in a changing economic landscape. The reduction in lending rates is expected to increase the affordability of loans, encouraging more individuals to consider purchasing homes or vehicles, thus stimulating economic activity. The banks’ measures reflect a broader commitment to adapting swiftly to economic policy changes and ensuring that customers benefit from lower borrowing costs.
Canara Bank and Indian Bank have announced reductions in their lending rates, a decision influenced by the Reserve Bank of India's (RBI) recent cut in the repo rate from 6.25% to 6.00%. This adjustment by the banks is intended to pass on the benefits of the lowered repo rate to customers, making loans more affordable. Canara Bank has implemented a 25 basis points reduction in its Repo Linked Lending Rate (RLLR), effective from 12th April 2025. Consequently, the interest rates for housing loans now start at 7.90% per annum, and vehicle loans begin at 8.20% per annum.
Canara Bank said: "With the RLLR reduction, the minimum rate of interest for all the loans have been lowered out of which, the popular loan products are: 🏠 Housing Loans – Now starting at 7.90% p.a. 🚗 Vehicle Loans – Now starting at 8.20% p.a. This means lower EMIs for existing and new borrowers and enhanced affordability for customers planning to purchase a house or vehicle."
In a similar move, Indian Bank has lowered its home loan rates from 8.15% to 7.90% per annum and vehicle loan rates from 8.50% to 8.25% per annum. These rate cuts are designed to provide financial relief by reducing EMIs, thereby making borrowing more accessible. Additionally, Indian Bank is offering incentives such as discounted processing fees and no documentation charges, enhancing the overall appeal of their loan products.
The Repo-Linked Lending Rate (RLLR) is the rate at which banks provide loans to customers, determined by the repo rate established by the RBI. The concept of "repo-linked lending rate" denotes an interest rate connected to the repo rate. As per an RBI circular distributed in October 2019, banks are required to tie their retail loans to external benchmark lending rates, known as E-BLR. Consequently, the repo rate has emerged as the standard benchmark for the majority of banks.
Other banks
The State Bank of India, the largest public sector bank in the country, has recently reduced its lending rates by up to 0.25%. Starting April 15, 2025, the bank's EBLR (External Benchmark Based Lending Rate) has been adjusted from 8.90% to 8.65%. Similarly, Punjab National Bank has also decreased its RLLR from 8.90% to 8.65%. Despite these changes, the Bank Spread (BSP) of 0.20% remains unaffected. Consequently, the final lending rate offered to customers has been lowered from 9.10% to 8.85%. Bank of India has aligned its lending rates with the Reserve Bank of India's 25 basis points repo rate cut. The bank's RBLR has been reduced from 9.1% to 8.85%, with the updated rate taking effect on April 9, 2025. In a BSE filing, Bank of India stated, "Effective April 9, 2025, the RBLR has been decreased by 25 basis points from 9.1% to 8.85%."
Rep rate cut
The adjustments by these banks align with their strategic goal to support customer needs in a changing economic landscape. The reduction in lending rates is expected to increase the affordability of loans, encouraging more individuals to consider purchasing homes or vehicles, thus stimulating economic activity. The banks’ measures reflect a broader commitment to adapting swiftly to economic policy changes and ensuring that customers benefit from lower borrowing costs.