Canara Bank has made a minor change to its MCLR (Marginal Cost of Funds Based Lending Rate), effective February 12, 2026. The bank has reduced only short-term rates by 5 basis points (0.05%), with the overnight MCLR reduced from 7.90% to 7.85% and the one-month MCLR reduced from 7.95% to 7.90%. However, long-term MCLR rates, ranging from three months to three years, remain unchanged.
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Canara Bank has made a minor change to its lending rates. The bank has informed the stock exchanges that its Marginal Cost of Funds Based Lending Rate (MCLR) has changed. These new rates will be effective from February 12, 2026. MCLR is the minimum interest rate below which a bank cannot lend. The RBI created it to ensure that interest rate changes are passed on to customers quickly and transparently. Canara Bank has reduced only the short-term MCLR, while keeping other long-term rates unchanged.
Significantly, the overnight MCLR has been reduced from 7.90 percent to 7.85 percent, representing a 5 basis point reduction. Similarly, the one-month MCLR has been reduced from 7.95 percent to 7.90 percent, also a 5 basis point reduction. The three-month MCLR will remain at 8.15 percent. The six-month MCLR will remain unchanged at 8.50 percent, the one-year MCLR at 8.70 percent, the two-year MCLR at 8.85 percent, and the three-year MCLR at 8.90 percent.
Interest Reduction
This change is significant because many types of loans, such as home loans, car loans, and personal loans, are linked to the bank’s MCLR. Especially those loans that are reviewed for a shorter period or new borrowers may benefit slightly. The lower overnight and one-month rates will reduce borrowing costs slightly. Although this reduction is not very much, only 5 basis points i.e. 0.05 percent, but still it is good news for the customers.
Loan takers will get benefit
This move comes amid rising credit demand. Loan demand from both retail and wholesale sectors is strong. The RBI also wants the impact of interest rates to be reflected quickly. Therefore, the bank has supported this by reducing short-term rates.
Canara Bank officially disclosed this information to the stock exchanges to ensure everyone is aware of the situation. This announcement by the bank is important for both investors and customers. If you have or are considering a loan from Canara Bank, this change may be beneficial, especially if your loan is linked to the MCLR. The bank did not change long-term rates because the cost of funds or other factors may not have changed significantly. Customers are advised to check their loan documents to see which tenor’s MCLR their loan is linked to. If it is for a shorter term, the benefits will be realized more quickly.
