Canara Bank has announced a revision in its Marginal Cost of Funds Based Lending Rate (MCLR). The new MCLR rates are as given below:
MCLR (Marginal Cost of Funds Based Lending Rate) is the minimum interest rate below which banks in India are generally not allowed to lend money to customers. It was introduced by the Reserve Bank of India (RBI) in April 2016 to make loan interest rates more transparent and responsive to changes in the market.
Banks use MCLR as a benchmark to decide the interest rates for different types of loans such as home loans, personal loans, vehicle loans, and business loans.
- Overnight MCLR
- 1 Month MCLR
- 3 Month MCLR
- 6 Month MCLR
- 1 Year MCLR
- 2 Year MCLR
- 3 Year MCLR
- If MCLR increases, loan interest rates may increase.
- If MCLR decreases, loan interest rates may reduce.
- Most home loans in India are linked to the 1-year MCLR benchmark.
Banks calculate MCLR based on several factors such as the bank’s cost of funds, operating costs, and the required minimum return on capital.
| S No | MCLR Tenor | Existing Rate | Rate w.e.f. 12.03.2026 |
|---|---|---|---|
| 1 | Overnight MCLR | 7.85 | 7.85 |
| 2 | One Month MCLR | 7.90 | 7.90 |
| 3 | Three Month MCLR | 8.15 | 8.15 |
| 4 | Six Month MCLR | 8.50 | 8.50 |
| 5 | One Year MCLR | 8.70 | 8.70 |
| 6 | Two Year MCLR | 8.85 | 8.95 |
| 7 | Three Year MCLR | 8.90 | 9.00 |
Impact on Borrowers
MCLR is the minimum lending rate below which banks are generally not allowed to lend. Changes in this rate can affect the interest rates on various loans such as home loans, personal loans, and corporate loans.
Since most of the shorter tenure MCLR rates remain unchanged, borrowers with loans linked to these benchmarks may not see any immediate change in their interest rates. However, loans linked to two-year and three-year MCLR tenors could become slightly more expensive.
