Canara Bank, a state-owned bank, has reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) by 10 basis points (0.10 percentage points) across all tenors, effective from April 12. This reduction makes loans linked to the MCLR benchmark cheaper for consumers. The one-year tenor MCLR, which is used to price most consumer loans such as auto and personal loans, has been reduced to 9% from the existing rate of 9.10%.
The new MCLR rates for other tenors are as follows: one-month, three-month, and six-month tenors will be in the range of 8.25-8.80%. The MCLR on overnight tenor will be 8.20%, down from 8.30%. This reduction is a result of the Reserve Bank of India’s (RBI) decision to slash its benchmark lending rate by 25 basis points to 6% last month. This marks the second consecutive rate cut this year, and it is expected to have a positive impact on the economy.
The reduction in MCLR by Canara Bank is likely to benefit consumers who have taken loans linked to the MCLR benchmark. With the reduced interest rates, borrowers can expect to pay lower interest on their loans, which can help reduce their financial burden. The move is also expected to boost credit growth and increase lending activity in the economy.
The RBI’s decision to cut interest rates is aimed at stimulating economic growth, which has been slowing down in recent times. By reducing the benchmark lending rate, the RBI is encouraging banks to lend more and at lower interest rates, which can help increase consumption and investment in the economy. Canara Bank’s decision to reduce its MCLR is in line with the RBI’s efforts to boost economic growth and is expected to have a positive impact on the banking and financial sector.
Overall, the reduction in MCLR by Canara Bank is a welcome move for consumers and is expected to have a positive impact on the economy. With the new rates effective from April 12, borrowers can expect to benefit from lower interest rates on their loans. The move is also expected to increase lending activity and boost credit growth, which can help stimulate economic growth.