Canara Bank bucks trend, cuts lending rates by 15 bps post RBI's repo rate hike

Canara Bank cuts lending rates: Despite the hike in repo rate by Reserve Bank earlier this week, Canara Bank has announced a reduction in lending rates by 15 basis points on Friday.

The public sector lender said in a regulatory filing that the revised Repo Linked Lending Rate (RLLR) of the bank will come into effect from February 12. 

Canara Bank's new RLLR will be 9.25 per cent after the rate cut, in comparison to the existing 9.40 per cent.

Also Read: Repo rate hike effect: PNB raises lending rates by 25 bps; Bank of Baroda's 5 bps hike to be effective from Feb 12

Banks have been revising their lending rates after the Reserve Bank of India (RBI) hiked the benchmark policy rate by 25 basis points to 6.5 per cent on Wednesday, citing sticky core inflation.

Close on the heels of RBI's announcement, Punjab National Bank announced an increase of 25 basis points - from 8.75 per cent to 9 per cent — in its Repo Linked Lending Rate (RLLR). PNB's rate hike came into effect from Thursday onwards.

Meanwhile, Bank of Baroda also announced an increase in its Marginal Cost of Funds Based Lending Rate (MCLR) by 5 basis points across all tenures.

After the revision, BoB's MCLR has risen from 7.85 per cent to 7.90 per cent for the overnight tenure. The bank said in a regulatory filing that the new rates will be effective from February 12.

RBI's repo rate hike was the sixth instance that the interest rate has been hiked by the central bank since May last year, taking the total quantum of increase to 250 basis points.

(With PTI Inputs)