After UCO Bank, Canara Bank and Bank of Baroda to hike interest rates from August 12

Public-sector banks such as Bank of Baroda, Canara Bank, and UCO Bank, have increased their Marginal Cost of Funds-based Lending Rates(MCLR) in different tenures which will result in higher costs for consumer loans.

Marginal Cost of Funds based Lending Rate (MCLR) is the minimum lending rate below which a bank is not allowed to lend to its customers

This comes after the Reserve Bank of India’s (RBI) decided to keep the benchmark interest rate at 6.50%.

The revised rates for Bank of Baroda and Canara Bank will take effect from August 12. UCO Bank has increased the lending rate for specific tenures, effective August 10, 2024.

Canara Bank revised rates

In Q1 FY 25, Canara Bank’s standalone net profit increased by 10.5 percent on an year on year basis to ₹3,905 crore. The bank reported a net profit of ₹3,535 crore in the same quarter previous year. The net interest income (NII) increased by 6 percent on an year on year basis to ₹9,166 from ₹8,666 crore in the previous year.

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Thursday, August 8, kept the policy rates unchanged at 6.5 per cent, maintaining the status quo.

The MPC continued with the policy stance of ‘withdrawal of accommodation’ despite highlighting good economic growth and signs of easing inflation. The standing deposit facility (SDF) rate remains at 6.25 per cent, and the marginal standing facility (MSF) rate and the bank rate will be at 6.75 per cent.