Home / Money / Personal Finance /  Canara Bank to hike lending rates by 15 bps across tenures: EMIs to go up

The Repo Linked Lending Rate (RLLR) and Marginal Cost of Funds Based Lending Rate (MCLR) have been hiked by public sector lender Canara Bank. The revised rates will go into effect on October 7, 2022. The bank increased the MCLR and RLLR across all tenors in response to the adjustment, and the hike in lending rates is aligned with the RBI's 50 basis point increase in the repo rate to 5.9%.

Canara Bank Marginal Cost of Funds Based Lending Rate (MCLR)

On overnight to 1-month MCLR, Canara Bank has hiked rates by 15 bps from 6.90% to 7.05%. On a three-month MCLR, the rate has been hiked by 15 bps from 7.25% to 7.40% and on a six-month MCLR, the rate has been hiked by 15 bps from 7.65% to 7.80%. On one year MCLR, the bank has hiked its rate by 1 bps from 7.75% to 7.90%.

The minimal lending rate or the internal benchmark below which a bank is prohibited from lending is known as the Marginal Cost of Funds based Lending Rate (MCLR). Since the repo rate and the marginal cost of funds-based lending rate are linked, the RBI's 50-bps increase in the repo rate to 5.90% would have an effect on Canara Bank's floating interest rate on your home loan.

Canara Bank MCLR
View Full Image
Canara Bank MCLR (BSE)

Canara Bank Repo Linked Lending Rate (RLLR)

Canara Bank increased its Repo Linked Lending Rate (RLLR) rate by 50 basis points, from 8.30% to 8.80%. Repo linked lending rate, also known as RLLR, is the lending rate that is linked to the repo rate set by the RBI. However, a number of variables, including the loan amount and loan-to-value ratio, affect the existing RLLR interest rate. Since RLLR is linked to an external benchmark, the interest rates on loans fluctuate.

Your EMIs will increase starting on the next reset date since Canara Bank has increased its Revision in Marginal Cost of Funds Based Lending Rate (MCLR) and Repo Linked Lending Rate (RLLR). Banks like ICICI Bank, Bank of India and Punjab National Bank (PNB), SBI, HDFC Bank, Kotak Mahindra Bank, Union Bank of India, and Indian Overseas Bank have already started raising their lending rates in response to the Reserve Bank of India's (RBI) 50 basis point increase in the repo rate to 5.9%. The repo rate has been raised by 140 basis points since May in an attempt to control inflation. Consumer price inflation remains above the central bank's tolerance level, according to RBI governor Shaktikanta Das, who made the announcement of the rate hikes in its Monetary Policy Committee (MPC) held in September 2022. This means that more rate hikes in the near future may be likely to occur, as many experts also believe, and as a result, loans will become costlier.

 

ABOUT THE AUTHOR

Vipul Das

Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less

Recommended For You

Trending Stocks

×
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout