Canara Bank has increased the Repo Linked Lending Rate (RLLR) and Marginal Cost of Funds Based Lending Rate (MCLR). The new interest rates are effective from January 7, 2023, according to the BSE filing.

Canara Bank MCLR
Canara Bank increased rates overnight to 1-month MCLR by 20 basis points, from 7.30% to 7.50%. The three-month MCLR has been increased by 25 bps to 7.85%, while the six-month MCLR has been increased from 8.05% to 8.20%. The bank increased the one-year MCLR from 8.15% to 8.35%.

Canara Bank RLLR
According to the Canara Bank BSE filing, “RLLR OF THE BANK – 9.15% w.e.f 07.1.2023.” Earlier, the RLLR was 8.80%.

According to the Canara Bank press release, “The above MCLRs shall be applicable only to new loans/advances sanctioned/first disbursement made on or after 07.01.2023 and those credit facilities renewed/reviewed/reset undertaken and where switchover to MCLR linked interest rate is permitted at the option of the borrower, on or after 07.01.2023. The above MCLRs will be effective till the next review.”

“Existing borrowers of the Bank shall have the option to switch over to interest rates linked to MCLR (other than Fixed Rate Loans). Borrowers willing to switch over to the MCLR-based interest rate may contact the branch,” the bank stated.

Banks including ICICI Bank, PNB, Bank of India, and YES bank have already hiked their MCLR in the month of January.Borrowers should be prepared for more increases in their loan interest rates as the central bank is anticipated to hike policy rates. The borrower may decide to extend the loan’s term if she is unable to meet the increased EMI instalments. It is essential to remember that higher EMIs will result in lower interest payments than longer loan durations.