Canara Bank has informed the Exchange about General Updates Revision in Marginal Cost of Funds Based Lending Rate
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Canara Bank has revised its Marginal Cost of Funds Based Lending Rate (MCLR) downward by 10 basis points across all tenors, effective 12 May 2025. The overnight MCLR moves from 8.30% to 8.20%, one-month from 8.35% to 8.25%, three-month from 8.55% to 8.45%, six-month from 8.90% to 8.80%, and one-year from 9.10% to 9.00%. The two-year and three-year MCLRs have also been cut by 10 bps to 9.15% and 9.20% respectively. MCLR is the internal benchmark used by banks to price most floating-rate loans. The uniform 10 bps reduction suggests a softening of the bank's cost of funds and is aimed at making borrowings cheaper for retail and corporate customers.
Lower MCLR is good news for existing and new borrowers of MCLR-linked loans, who may see slightly lower EMIs or interest costs going forward. For shareholders, this could support loan growth but may put mild pressure on the bank's net interest margins, making the impact on the stock broadly neutral in the short term.