Canara Bank, Bank of Baroda increase lending rates

Two major banks, Bank of Baroda and Canara Bank, have raised their lending rates by up to 10 basis points (bps) on specific loan tenures. This change took effect on August 12, 2026, following the Reserve Bank of India's (RBI) decision to keep the repo rate steady at 5.25% during its August 5, 2026 monetary policy committee meeting.

MCLR, or Marginal Cost of Funds-based Lending Rate, is the minimum interest rate a bank must charge for a particular loan. It sets the lowest limit for a loan's interest rate, which remains in place unless altered by the RBI. The banking regulatory body introduced MCLR in 2016.

Canara Bank raised MCLR by 5 bps on select tenures, with the overnight MCLR remaining at 7.95%. The one-month MCLR increased from 8% to 8.05%, the three-month MCLR rose from 8.25% to 8.30%, and the six-month MCLR went up from 8.60% to 8.65%. The one-year MCLR climbed from 8.75% to 8.80%, while the two-year and three-year MCLRs increased by 5 bps each to 9.05% and 9.10%, respectively.

On the other hand, Bank of Baroda increased MCLR by 10 bps on a select tenure, bringing rates to range from 7.85% to 8.75%. The overnight and one-month MCLRs stayed the same at 7.85% and 7.95%, respectively. The three-month MCLR jumped from 8.20% to 8.30%, while the six-month and one-year MCLRs remained unchanged at 8.50% and 8.75%, respectively.