Canara Bank Raises MCLR Rates for Two-Year and Three-Year Loans

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Canara Bank has increased its Marginal Cost of Funds Based Lending Rate (MCLR) for certain loan tenures, raising the rates by 10 basis points for two-year and three-year periods. This revision affects loans linked to MCLR, including home, auto, and personal loans. The new rates will come into effect from March 12, 2026.

With this adjustment, the two-year MCLR has risen from 8.85% to 8.95%, while the three-year MCLR has increased from 8.90% to 9.00%.

Latest Updates on Canara Bank MCLR Rates

The bank’s recent MCLR revision reflects changes in medium-term lending rates, indicating an upward adjustment in its benchmark interest rates. According to Canara Bank’s regulatory filing, the MCLR-linked lending rates for two-year and three-year tenures have been increased by 10 basis points. These revised rates will apply to loans that are directly tied to the MCLR benchmark.

Updated Canara Bank MCLR Rate Structure

The revised lending rates for specific tenures of MCLR-linked loans in India are as follows:

• Two-Year MCLR: 8.95% (previously 8.85%)

• Three-Year MCLR: 9.00% (previously 8.90%)

These rates serve as the base on which banks calculate the interest rates for various loans.

Understanding MCLR and Its Impact on Loan Interest Rates

The Marginal Cost of Funds Based Lending Rate (MCLR) is a benchmark rate used by Indian banks to set the minimum interest rate on loans. Introduced by the Reserve Bank of India (RBI) in 2016, the MCLR system replaced the earlier base rate framework.

Under this system, banks determine lending rates based on factors such as funding costs, operating expenses, and cash reserve requirements. As a result, any changes in the MCLR directly influence the interest rates on loans tied to this benchmark.

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