Following footsteps of various banks, HDFC Bank and Canara Bank on Wednesday slashed its marginal cost of funds based lending rate in the range of 90 basis points -  75 basis points across respectively under all maturities. 

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The revised MCLR will be effective from Saturday, January 7, 2017, the banks said.

HDFC Bank's new MCLR rate for various tenure are -  overnight MCLR to 7.85%, while the maximum decrease of 0.90% has been effected in the 3 months tenure which will go down to 7.90%.

A PTI report stated, the one-year MCLR which is used as the benchmark for a slew of products including home loans has come down 0.75% to 8.15% as against SBI's 8% and ICICI Bank's 8.20%. 

In December, the overnight MCLR rate at HDFC Bank was 8.65%, one month MCLR rate was 8.70%, three-month was 8.8%, six-month MCLR was 8.85% and one-year MCLR will be was 8.90%.

As per the new rates at Canara Bank, the overnight MCLR will be at 8.20% instead of 8.90%, one month MCLR will be at 8.25% as against 8.95%, three-month MCLR will be 8.30% as against 9.05%, six month MCLR will be 8.40% as against 9.10% and one year MCLR will be at 8.45% as against 9.15%.

The bank's decision came in as various banks started reducing MCLR rates after they are flooded with liquidity post the demonetisation drive which ended on December 31.

On Sunday, the State Bank of India, was the first bank to announced the MCLR rate cut by 90 bps. Soon, other banks including, ICICI bank, Punjab National Bank, IDBI Bank, HDFC Bank, Bank of India also joined the rate cut roadmap. 

On Wednesday, the shares of Canara Bank closed at Rs 264.05 per share, down 0.30%, or Rs 0.80 on BSE. However, the shares of HDFC Bank ended at Rs 1186.10 per piece, down 0.36%, or Rs 4.30.