Canara Bank Increases Lending Rates, Loans Become Costlier

State-owned Canara Bank has raised the marginal cost of funds-based lending rate (MCLR) by 5 basis points across various tenors. This hike implies increased costs for consumer loans, such as auto and personal loans. The new rates will be effective from August 12, 2024.

State-owned Canara Bank on Friday announced an increase in its marginal cost of funds-based lending rate (MCLR) by 5 basis points (0.05 percentage point) across different tenors, impacting the cost of most consumer loans.

The adjusted benchmark one-year tenor MCLR, which serves as a pricing metric for loans like auto and personal, is now set at 9 per cent, previously at 8.95 per cent, as per the bank's regulatory filing.

For other tenors, the three-year MCLR rate will now stand at 9.40 per cent, while the two-year rate is adjusted to 9.30 per cent, each up by 5 basis points. Shorter tenors such as one-month, three-month, and six-month, will now range from 8.35 to 8.80 per cent. The overnight tenor rate will move to 8.25 per cent from its prior 8.20 per cent.

The new rates are slated to take effect from August 12, 2024. This development comes just a day after the Reserve Bank of India opted to maintain its benchmark lending rate at 6.5 per cent for the ninth consecutive time.