Three major public sector banks in India have announced increases in their marginal cost of funds-based lending rates (MCLR), effective from August 10 and August 12. The adjustments will affect various loan tenures, making borrowing slightly more expensive for consumers and businesses. The moves reflect the banks’ responses to current economic conditions and the Reserve Bank of India’s (RBI) monetary policy stance.

Bank of Baroda, UCO Bank, and Canara Bank are set to implement the rate hikes as follows:

Bank of Baroda will apply its revised MCLR rates to select tenures starting August 12.

UCO Bank will increase its lending rates by 5 basis points for specific tenures from August 10.

Canara Bank will raise its MCLR by 5 basis points across all tenures beginning August 12.

Lending Rate Changes Overview

The increase in MCLR by these banks follows the RBI’s decision to keep its benchmark lending rate at 6.5%. For Canara Bank, the one-year MCLR, which impacts auto and personal loans, will rise to 9%. This strategic adjustment aims to align with the prevailing economic conditions and manage the banks’ financial stability.

These rate hikes are anticipated to impact loan borrowers across the spectrum, from individuals seeking personal loans to businesses relying on credit for operations and expansion.