Canara Bank revises its MCLR, RLLR, FD rates following RBI repo rate hike in September. Check new rates here

Public sector lender Canara Bank has increased its Repo Linked Lending Rate (RLLR) and Marginal Cost of Funds Based Lending Rate (MCLR) in line with the Reserve Bank of India’s repo rate hike on September 30. The revised rates will go into effect on October 7, 2022. According to the bank’s website, the bank has hiked the MCLR and RLLR across all tenors.  

It is to be noted that the central bank has been increasing the repo rate since the month of May this year in a bid to control inflation. The repo rate has been raised by 140 basis points since May. The recent 50 bps rate hike is the fourth hike since May. The current repo rate is 5.9 per cent. 

The bank has also revised the interest rates on term deposits or fixed deposits for all tenors. 

Canara Bank's MCLR 

The Marginal Cost of Funds-based Lending Rate can be defined as the minimum lending rate below which a bank is not permitted to lend. This rate, therefore, affects all loans and savings schemes, such as fixed deposits, and others.  

Canara Bank has hiked rates by 15 bps from 6.90 per cent to 7.05 per cent for schemes in overnight to 1-month MCLR. For the three-month MCLR, the rate has been hiked by 15 bps from 7.25 per cent to 7.40 per cent and on a six-month MCLR, the rate has been hiked by 15 bps from 7.65 per cent to 7.80 per cent. On one year MCLR, the bank has hiked its rate by 1 bps from 7.75 per cent per cent to 7.90 per cent. 

Bank's RLLR 

When banks link the interest rate on their loans to the repo rate, this is termed as the repo linked lending rate.  It can be defined as: RLLR = RBI’s repo rate + Margin/spread charged by the bank.  

As RLLR is linked to an external benchmark, the loan interest rates also fluctuate. The margin depends on a number of variables, including the loan amount and loan-to-value ratio. Canara Bank increased its RLLR by 50 bps, from 8.30 per cent to 8.80 per cent. 

New FD rates

The Canara Bank has raised its interest rates for all tenors and is currently providing an interest rate on deposits maturing in 7 days to 10 years that range from 3.25 per cent to 7.00 per cent for the general public and 3.25 per cent to 7.50 per cent for senior citizens.
The bank has raised its interest rate on fixed deposits maturing in 7 days to 45 days by 35 basis points (bps), from 2.90 per cent to 3.25 per cent. For 46 days to 90 days, the rates have gone up from 4 per cent to 4.25 per cent. 
For schemes between 91 days and 179 days, depositors can get interest at the rate of 4.50 per cent from 4.05 per cent. For term deposits maturing in 180 days to 269 days, depositors will now earn interest at a rate of 5.90 per cent instead of 4.65 per cent.
On deposits of 270 days to less than a year, the public sector bank has increased its interest rate from 4.65 per cent to 6.00 per cent. The bank increased its interest rate from 5.50 per cent to 6.50 per cent on fixed deposits maturing in 1 year to 2 years, and from 5.55 per cent to 6.50 per cent for schemes running for 1 year or more but less than 2 years.
The interest rate on fixed deposits maturing in 666 days has climbed to 7 per cent from 6 per cent, while the interest rate on term deposits maturing in 2 years or more but less than 3 years has increased from 5.60 per cent to 6.50 per cent. 
The bank has hiked its interest rate on fixed deposits maturing in 3 years and above to less than 5 years from 5.75 per cent to 6.50 per cent. On term deposits maturing in 5 years and above to 10 Years, it is offering a rate of 7.00 per cent instead of 5.75 per cent.