New Delhi, May 10 – In a move that promises relief for borrowers, state-owned Canara Bank has announced a 10 basis point (0.10%) cut in its Marginal Cost of Funds-Based Lending Rate (MCLR) across most tenors, effectively reducing the cost of consumer loans.
New MCLR Rates Effective April 12
According to a regulatory filing on Friday, the revised rates will come into effect from April 12. The most significant change is the benchmark one-year MCLR, widely used for pricing retail loans such as auto and personal loans, which has been revised from 9.10% to 9.00%.Revised MCLR Across Tenors:
- Overnight: 8.20% (down from 8.30%)
- One-month to Six-month: Now ranges between 8.25% to 8.80%
- One-year: 9.00% (previously 9.10%)
RBI’s Rate Cut Boosts Lending Sentiment
The rate revision by Canara Bank comes on the heels of the Reserve Bank of India’s 25 basis point cut in its benchmark repo rate last month, bringing it down to 6%. This marks the second consecutive rate cut by the RBI in 2025, setting a favorable tone for borrowing across the economy.The reduction in MCLR is expected to positively impact loan EMIs for both existing and new customers, especially those with floating-rate loans linked to the one-year MCLR benchmark.
Stay tuned for updates as more banks may follow suit in response to the RBI’s dovish stance on monetary policy.