Canara Bank MCLR Hike: RBI’s Monetary Policy Committee, which takes decisions on policy interest rates i.e. repo rate, had a meeting recently. In this, for the ninth time, it was decided not to make any change in the repo rate. 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 the public sector Canara Bank quietly made the loan expensive.
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 loans, car loans and personal loans will increase. Canara Bank has said that the benchmark one-year period MCLR has been increased from 9 percent to 9.05 percent. Apart from this, MCLR for one month, 3 months and 6 months period 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
While deciding MCLR, many factors are taken into consideration, which include deposit rate, repo rate, operational cost and cost of maintaining cash reserve ratio. Usually, the change in repo rate affects the MCLR rate. Change in MCLR affects the interest rate of the loan, due to which the EMI of the borrowers increases.
EMI of loan will increase
The effect of increase in MCLR will be seen on the interest rate 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 loan will get expensive loan.
