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Canara Bank has decided to reduce its Repo-Linked Lending Rate (RLLR) and Marginal Cost of Funds based Lending Rate (MCLR) by 40 basis points and 20 basis points, respectively, with effect from June 7, 2020.
The Bengaluru-headquartered public sector bank, in a regulatory filing, said the new RLLR will be 6.90 per cent against 7.30 per cent now.
Following a regulatory directive, Banks are linking all new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans to Micro, Small and Medium Enterprises since October 01, 2019 to an external benchmark.
Majority of the banks are using the repo rate as the external benchmark. Repo rate is the interest rate at which the Reserve Bank of India provides funds to banks to help them overcome temporary liquidity mismatches.
Canara Bank has also reduced its MCLR. The MCLR has been reduced by 20 basis points across the board. The revised one-year benchmark MCLR will be 7.65 per cent against 7.85 per cent now.
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