Customers hoping for cheaper loans are facing a longer wait. The Reserve Bank has kept the repo rate unchanged for the 9th consecutive Monetary Policy Committee (MPC) meeting.
However, three major government banks—UCO Bank, Bank of Baroda, and Canara Bank—have announced an increase in their Marginal Cost of Lending Rates (MCLR).
This decision to raise interest rates across different loan periods means that loans such as home, car, and education loans will now be more expensive for many customers.
Canara Bank Increases Loan Costs
Canara Bank, one of the major public sector banks, has increased its MCLR by 5 basis points across all loan tenures.
As a result, the overnight MCLR has risen from 8.20% to 8.25%, while the one-month MCLR has increased from 8.30% to 8.35%.
The three-month MCLR now stands at 8.45%, up from 8.40%, and the six-month MCLR has gone from 8.75% to 8.80%.
For one-year, two-year, and three-year periods, the MCLR has risen to 9.00%, 9.30%, and 9.40%, respectively.
With these new rates, the Equated Monthly Installments (EMIs) for home, car, and other loans will increase. The revised rates will be effective from August 12, 2024.
UCO Bank and Bank of Baroda Follow Suit
UCO Bank has also raised its interest rates, affecting both its MCLR and other benchmark rates.
The overnight MCLR is now 8.20%, with increases in the one-month (8.35%), three-month (8.50%), six-month (8.80%), and one-year (8.95%) MCLR rates.
Additionally, the one-year Term Loan Benchmark Rate (TBLR) has been adjusted to 6.85%. The new rates took effect on August 10, 2024.
Similarly, Bank of Baroda has revised its interest rates. The bank’s overnight MCLR is now 8.15%, with increases across all periods, including the one-month (8.35%),
three-month (8.50%), six-month (8.75%), and one-year (8.95%) MCLR rates. These changes will be implemented from August 12, 2024.
These increases mean that customers will need to prepare for higher EMIs on their loans.
