Canara Bank MCLR Hike: A meeting of the Monetary Policy Committee of RBI, which takes decisions on policy interest rates i.e. repo rate, was held recently. In this, it was decided not to make any change in the repo rate for the ninth time. Repo rate is the rate at which RBI gives loans to the banks of the country. RBI did not make any change in the repo rate but public sector Canara Bank silently made the loan costlier.
Canara Bank has increased the Margin Cost of Funds Based Lending Rates (MCLR) by 5 basis points i.e. 0.05 percent. These new rates will be applicable from October 12, 2024. Let us tell you that due to increase in MCLR, interest rates on home loan, car loan and personal loan will increase. Canara Bank has said that the benchmark MCLR for one year period has been increased from 9 percent to 9.05 percent. Apart from this, MCLR for the period of one month, 3 months and 6 months will be in the range of 8.40-8.85 percent. MCLR for one day loan has been increased from 8.25 percent to 8.30 percent.
How is MCLR decided?
Many factors are taken into consideration while determining MCLR which include deposit rate, repo rate, operational cost and cost of maintaining cash reserves ratio. Generally, changes in repo rate affect the MCLR rate. Changes in MCLR affect the loan interest rate, due to which the EMI of the borrowers increases.
Loan EMI will increase
The effect of increase in MCLR will be seen on the interest rates of all types of loans related to it including home loan, auto loan, personal loan. Old customers will have to pay more EMI than before. Customers taking new loans will get expensive loans.
FIRST PUBLISHED: October 10, 2024, 22:41 IST