What happens to FD interest rates after RBI MPC hikes interest rates? Calculation explains basis 25 bps

The Reserve Bank of India (RBI) has increased the repo rate by 25 basis points to 5.50%, its first hike since February 2023. This move could potentially affect fixed deposit (FD) rates, although banks are not obligated to pass on the entire increase. The transmission of this rate hike to FD rates will depend on each bank's cost of funds and their competitive positioning.