Bank of Baroda and Canara Bank have increased their Marginal Cost of Funds Based Lending Rates (MCLR) by up to 10 basis points (bps) on select tenures. A basis point is the one-hundredth of a percentage point. The revised MCLR rates of both banks are effective from August 12, 2026 .Borrowers with loans linked to the Marginal Cost of Funds Based Lending Rate (MCLR) could see their loan interest rates rise following the latest rate revision by Bank of Baroda and Canara Bank. The decision came a week after the Reserve Bank of India (RBI) maintained the repo rate at 5.25% in its monetary policy committee (MPC) meeting on August 5, 2026.What is MCLR?MCLR is the minimum interest rate a financial institution needs to charge for a specific loan. It dictates the lower limit of the interest rate for a loan. This rate limit is set in stone for borrowers unless specified otherwise by the RBI. The RBI introduced MCLR in 2016. Canara Bank lending ratesCanara Bank has increased MCLR on select tenures by 5bps. After the increase, lending rates will range from 7.95% to 9.10% across tenures. The overnight MCLR is unchanged at 7.95%. One-month MCLR is increased by 5 bps basis points from 8% to 8.05%. Similarly, the three-month MCLR has been raised from 8.25% to 8.30%, while the six-month MCLR has moved up from 8.60% to 8.65%. The one- year MCLR has also been increased by 5 basis points, from 8.75% to 8.80%. The two- year and three- year MCLRs were increased by 5 bps each to 9.05% and 9.10%, respectively.No.MCLR TenorExisting Rate (%)Rate w.e.f. 12.08.2026 (%)1Overnight MCLR7.957.952One Month MCLR8.008.053Three Month MCLR8.258.304Six Month MCLR8.608.655One Year MCLR8.758.806Two Year MCLR9.009.057Three Year MCLR9.059.10Bank of Baroda lending ratesBank of Baroda has increased MCLR on a select tenure by 10 bps. After the increase, lending rates will range from 7.85% to 8.75% across tenures. The overnight and one-month MCLRs are unchanged at 7.85% and 7.95% respectively. The three-month MCLR has increased by 10 bps from 8.20% to 8.30%. While the six-month and one-year MCLRs have been kept unchanged at 8.50% and 8.75% respectively.MCLR TenorExisting MCLR (%)MCLR (%) w.e.f. 12 August 2026Overnight7.857.85One Month7.957.95Three Month8.208.30Six Month8.508.50One Year8.758.75
