Canara Bank Loans Get Cheaper After MCLR Cut

State-owned Canara Bank announced a cut in its MCLR (marginal cost of fund-based lending rates) by 0.05-0.15 percent with effect from 7 November.

The one-year MCLR - the benchmark for most of the consumer loans - has been reduced by 0.05 percent to 7.35 percent from 7.40 percent currently, Canara Bank said in a regulatory filing on Friday.

MCLR Tenure	Rates till 6 Nov	Rates with effect from 7 Nov
Overnight	6.95%	6.80%
One Month	6.95%	6.80%
Three Month	7.10%	6.95%
Six Month	7.35%	7.30%
One Year	7.40%	7.35%

On Thursday, Indian Overseas Bank had announced to cut the one, two and three-year MCLRs by 0.05 percent each to 7.45 percent. The overnight and one-month MCLR will be priced at 6.85 percent each from 7.05 percent and 7.35 percent, respectively, at present.

The new rates will come to effect from 10 November 2020, Indian Overseas Bank had said.

Banks, both public and private sector, have been announcing rate cuts in line with RBI's repo rate cuts after COVID-19 outbreak, to infuse liquidity into the economy. The central bank cut the key policy rates in March and May, which in total accounted for 1.15 percent cut since the lockdown.

Repo rate is the rate at which RBI lends money to commercial banks in the event of a shortfall in funds. The benefit of the rate cut is passed on to consumers by banks