Canara Bank raises MCLR by 5 basis points, raising costs for home, personal and auto loans

Canara Bank, one of India’s largest public sector banks, has increased its marginal cost of funds-based lending rate (MCLR) by 5 basis points. The new rates came into effect on April 12, 2023. The MCLR for six months and one year has been increased to 8.45 per cent and 8.65 per cent, respectively, while rates for other tenures remain unchanged. The overnight MCLR stands at 7.90 per cent, one-month MCLR at 8 per cent, and three-month MCLR at 8.15 per cent.

The bank clarified that the revised MCLRs would be applicable only to new loans, first disbursement made on or after April 12, 2023, and those credit facilities renewed or reset on or after the same date. Existing borrowers have the option to switch to MCLR-linked interest rates other than fixed-rate loans. However, the bank has kept the option of switching to MCLR-based interest rates with the borrower’s consent.

In a notification, the bank stated that the new MCLR rates would be effective until the next review. Borrowers willing to switch to the MCLR-based interest rate may contact their nearest Canara Bank branch. The bank is expecting that the increased MCLR will aid in sustaining its financial stability and boost profitability.

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