Bank of Baroda and Canara Bank have increased their Marginal Cost of Funds Based Lending Rate (MCLR) for select tenures. The revised rates came into effect on August 12, 2026, with increases ranging from 5 to 10 basis points depending on the tenure.
Canara Bank has increased its MCLR for different tenures by up to 5 basis points. One basis point is equal to 0.01 percent. The bank’s revised MCLR rates range from 7.95 percent to 9.10 percent, depending on the tenure.
The overnight MCLR has been retained at 7.95 percent. The one-month MCLR has been increased from 8 percent to 8.05 percent.
The three-month MCLR is now 8.30 percent, compared with 8.25 percent earlier. The six-month rate has increased from 8.60 percent to 8.65 percent, while the one-year MCLR has risen from 8.75 percent to 8.80 percent. The two-year MCLR has increased to 9.05 percent, while the three-year MCLR has risen to 9.10 percent.
Bank of Baroda has also revised its MCLR for select tenures. The bank has increased its three-month MCLR by 10 basis points, from 8.20 percent to 8.30 percent.
The overnight MCLR has been retained at 7.85 percent, while the one-month MCLR remains unchanged at 7.95 percent. The six-month MCLR is unchanged at 8.50 percent and the one-year MCLR remains at 8.75 percent.
Bank of Baroda’s revised MCLR rates range from 7.85 percent to 8.75 percent across different tenures.
MCLR stands for Marginal Cost of Funds Based Lending Rate. It is an internal benchmark rate used by banks to determine the interest rates on several types of loans. The Reserve Bank of India introduced the MCLR system in April 2016.
When MCLR increases, the interest cost of floating-rate loans linked to the benchmark can rise. However, the EMI of every customer does not necessarily increase immediately. The actual impact depends on the type of loan, the bank’s spread and the interest rate reset date.
The increase in MCLR may affect customers whose existing loan interest rates are linked to the benchmark. These may include some home loans, personal loans and other retail or corporate loans.
If the revised MCLR is applied on the loan’s next reset date, the effective interest rate for the customer may increase. As a result, the bank may increase the EMI or extend the loan tenure while keeping the EMI unchanged.
Customers whose loans are linked to another external benchmark, such as a repo-linked lending rate, may not necessarily be directly affected by the MCLR changes.
The changes come after the Reserve Bank of India retained the repo rate at 5.25 percent in its recent monetary policy review.
