Canara Bank raises interest rates on loans and advances: Check the details

Effective July 7, 2022, Canara Bank, a public sector lender, has increased its marginal cost of funds-based lending rate (MCLR) and repo-linked lending rate (RLLR) for loans/advances. one day to one year. As a result, the bank’s duration-linked MCLR will come into effect on July 7, 2022. The bank raised its one-month overnight MCLR rate by 10 basis points to 6.75%. The 3-month MCLR rate increased by 10 basis points, from 6.95% to 7.05%, while the 6-month MCLR rate increased by 10 basis points, from 7.35% to 7 .45%. The one-year MCLR is the standard by which banks assess their home loan rates, and for that term, the bank raised the rate by 10 basis points, from 7.40% to 7.50%.

Additionally, Canara Bank raised its repo-linked lending rate (RLLR) by 50 basis points. The RLLR used to be 7.30%, but is now 7.80%. Repo linked lending rate, also known as RLLR, is the lending rate that is linked to the repo rate set by the RBI. Following the 50 basis points increase in the repo rate by the RBI in June, banks’ MCLRs are affected, adding to the burden of EMI for those taking home loans. Canara Bank said in a note that “the bank’s existing borrowers will have the option to switch to MCLR-linked interest rates (other than fixed rate loans). Borrowers wishing to switch to the interest rate based on the MCLR can contact the branch.”

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Canara Bank MCLR (

“The above MCLRs only apply to new loans/advances sanctioned/first disbursement made on or after 07.07.2022 and to credit facilities/renewals/revised, resets undertaken and where the change to interest rate linked to MCLR is permitted at the option of the borrower, effective 07.07.2022,” the bank said in a press release.

And meanwhile, the MCLR was raised by 20 basis points by the two major public sector banks, ICICI and HDFC Bank. Effective July 1, ICICI Bank’s new MCLR rates are in effect. As a result of ICICI Bank’s MCLR rate increase, interest rates on home loans would increase for new and existing borrowers, which in turn would increase their EMIs for home loans, car loans and any other lending linked to marginal cost. Currently, ICICI Bank’s MCLR rates for six-month and one-year terms are 7.70% and 7.75%, respectively. Effective July 7, 2022, private sector lender HDFC Bank has increased its marginal cost of funds-based lending rate (MCLR) on loans of all tenors by 20 basis points. The three-year MCLR will be 8.25%, the two-year MCLR will be 8.15%, and the one-year MCLR, which is tied to many retail loans, will now be 8.05%. On the monthly reset date, the aforementioned bank will increase interest rates on home loans or any MCLR related loan products. The increase in MCLR will cause personal loans, home loans, auto loans, or any more expensive borrower to see an increase in monthly payment equivalents (EMIs) for MCLR-linked personal loan products from the above banks.

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