Canara Bank trimmed its Repo Linked Lending Rate (RLLR) from 8.75% to 8.25% post RBI's repo rate cut, offering relief to home and personal loan customers.
Home and personal loan interest rates reduced by Canara Bank - explore updated borrowing rates
The bank has joined the likes of other major banks in slashing its RLLR following the Reserve Bank of India's (RBI) 50 basis points (0.50%) repo rate reduction, which brings down the rate from 6% to 5.50%. This change, effective from June 12, 2025, translates to an affordable credit facility for customers attempting to secure home and personal loans, with either their EMIs reducing or loan tenures shortening.
The New Interest Rates will be in Effect from June 12, 2025
Canara Bank has notified that the new rates will commence from the aforementioned date. This means that for customers with loans connected to RLLR from Canara Bank, their EMIs will decrease or their loan duration will be shortened. The bank aims to provide budget-friendly and extended lending opportunities with this move.
Other Notable Banks and RBI's Repo Rate Reduction
Following the RBI's announcement, Punjab National Bank (PNB) and Bank of India (BOI) trimmed their RLLR, bringing the rates down from 8.85% to 8.35%. Concurrently, Bank of Baroda reduced its RLLR from 8.65% to 8.15%.
Furthermore, Indian Bank shaved its RLLR from 8.70% to 8.20%, while UCO Bank decreased its RLLR from 8.80% to 8.30%. UCO Bank also lowered its Marginal Cost of Funds based Lending Rate (MCLR) by 10 basis points in all tenures.
Bank Reduction: A Trend Among Private Banks
In the realm of private banks, HDFC Bank has also cut its MCLR by 10 basis points. The new one-year MCLR now stands at 8.90%, contributing to lower borrowing costs for home, personal, and SME loans.
The rate reductions will directly benefit those customers with floating-rate loans connected to either RLLR or MCLR. A decrease in EMI not only enhances the monthly budget but also boosts the likelihood of securing new loans. Public sector banks have led the way, and private banks are now adopting similar strategies.
Summing Up
In a time when inflation is restrained, and the government tries to stimulate economic growth, this reduction in interest rates should bring benefits for everyone, including the employed, businesspeople, and the middle-class.
The decrease in the Repo Linked Lending Rate (RLLR) by Canara Bank, as well as other major banks such as Punjab National Bank, Bank of India, Bank of Baroda, and Indian Bank, follows the Reserve Bank of India's (RBI) repo rate reduction. These reductions, effective from June 12, 2025, aim to offer an affordable credit facility to customers seeking home and personal loans by either reducing their EMIs or shortening loan tenures. HDFC Bank, a significant private bank, has also reduced its Marginal Cost of Funds based Lending Rate (MCLR) in a similar trend, lowering borrowing costs for home, personal, and SME loans. Consequently, these rate reductions can enhance the monthly budget of customers with floating-rate loans, boost the likelihood of securing new loans, and contribute to economic growth during a period of inflation restraint.
