Canara Bank has made a small change to its lending rates. The bank informed the stock exchanges that its Marginal Cost of Funds Based Lending Rate (MCLR) has been revised. The new rates are effective from February 12, 2026.
MCLR is the minimum interest rate below which a bank cannot lend. It was introduced by the Reserve Bank of India (RBI) to ensure that changes in interest rates are passed on to customers quickly and transparently.
The bank has reduced only its short-term MCLR, while keeping long-term rates unchanged.
Importantly, the overnight MCLR has been reduced from 7.90 percent to 7.85 percent, a cut of 5 basis points. The one-month MCLR has also been reduced from 7.95 percent to 7.90 percent, again a 5 basis point cut.
The three-month MCLR remains at 8.15 percent. The six-month MCLR stays at 8.50 percent. The one-year MCLR continues at 8.70 percent, the two-year at 8.85 percent, and the three-year at 8.90 percent.
This change matters because many loans, including home loans, car loans, and personal loans, are linked to a bank’s MCLR. Borrowers whose loans are reviewed frequently, or new borrowers, may benefit slightly.
The 5 basis point (0.05 percent) reduction in overnight and one-month rates will slightly lower borrowing costs. While the cut is small, it is still positive news for customers.
This move comes at a time when credit demand is rising in both retail and wholesale segments. The RBI wants interest rate cuts to be transmitted quickly to customers, and lowering short-term MCLR supports this goal.
The bank has officially shared this information with the stock exchange to keep investors and customers informed.
If you have taken or are planning to take a loan from Canara Bank, this change may benefit you, especially if your loan is linked to short-term MCLR.
Since long-term rates remain unchanged, customers should check their loan documents to understand which MCLR tenor applies to their loan. If it is linked to a shorter term, the benefit will be seen sooner.