Canara Bank Revises MCLR Lending Rates for Two and Three-Year Tenures

Canara Bank has announced a revision in its marginal cost of funds based lending rate (MCLR) for select tenures. The adjustment will come into effect from Thursday and applies to the bank’s two-year and three-year lending rates.

MCLR-linked loans account for a significant portion of the bank’s credit portfolio, meaning the revision could influence borrowing costs for some existing and new borrowers.

Canara Bank Increases MCLR for Select Tenures

The public sector lender has raised the MCLR for two-year and three-year loan tenures by 10 basis points. Following the revision, the two-year MCLR will stand at 8.95%, up from 8.85%, while the three-year MCLR has been increased to 9.00% from 8.90%.

The revised rates will take effect from Thursday, according to the bank’s regulatory filing.

Impact on Borrowers with MCLR-Linked Loans

Loans that are benchmarked to the MCLR framework may see changes in interest rates depending on their reset period. Since roughly half of Canara Bank’s loan book is linked to MCLR, the revision could influence the cost of borrowing for a portion of its customers when their loan terms are reviewed.

Borrowers whose loans are tied to the affected tenures may experience slightly higher interest payments following the rate adjustment.

Loan Portfolio of the Bank

As of the end of December last year, Canara Bank’s total loan portfolio stood at ₹11.92 lakh crore. The MCLR benchmark continues to be an important pricing reference for a large segment of the bank’s lending products.

The change in benchmark rates reflects adjustments in funding costs and broader market conditions that influence lending decisions.

MCLR Decisions by Other Public Sector Banks

While Canara Bank revised its lending rates, other public sector banks have taken different approaches. Bank of Baroda and UCO Bank recently kept their MCLR rates unchanged.

However, UCO Bank reduced treasury bill-linked benchmark rates by 5 basis points for the three-month and six-month tenures, while leaving the one-year rate unchanged.

Canara Bank Share Price Performance

Shares of Canara Bank were trading at ₹140.66 on 12 March 2026 at around 12:10 PM, reflecting a gain of ₹1.25 or 0.90% compared with the previous close of ₹139.41. During the trading session, the stock opened at ₹138.60 and moved within a range of ₹136.26 to ₹140.94.

Read More: CRED Receives RBI Authorisation to Operate as Payment Aggregator.

Conclusion

Canara Bank’s decision to increase MCLR for certain tenures reflects adjustments in lending benchmarks within the banking sector. Changes in these rates can influence borrowing costs for customers with MCLR-linked loans, depending on their loan terms and reset cycles.

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