Bank of Maharashtra and Canara Bank increase loan interest rates, FD rates also hiked

MCLR hike: Bank of Maharashtra has increased its Marginal Cost of Lending Rates (MCLR) by 10 basis points, effective from April 15, 2023. The one-year MCLR has gone up from 8.40 per cent to 8.50 per cent, which will directly impact the EMIs of customers who have availed home loans, car loans, and education loans for a one-year period. The 6-month MCLR has increased to 8.40 per cent, overnight MCLR to 7.90 per cent, and one-month MCLR to 8.10 per cent. This hike in interest rates has been made in response to the rise in inflation and deposit rates.

Canara Bank has also increased its loan interest rates by 5 basis points. According to the bank's website, the MCLR rate for six months and one year tenure is now 8.45 per cent and 8.65 per cent, respectively. However, there have been no changes made in the interest rates for loans with remaining tenures.

In addition to the MCLR hike, Bank of Maharashtra has also decided to increase the interest rates of its fixed deposits (FDs) for deposits of less than Rs. 2 crore. The bank is now offering interest rates ranging from 2.75 per cent to 5.75 per cent on FDs ranging from 7 days to 5 years. The bank is also offering a maximum interest rate of 7 per cent on a 200-day FD.

The increase in interest rates is expected to help banks balance their books by boosting their net interest margin. However, this increase may cause a burden on customers who have taken loans, particularly during a time when the economy is still recovering from the COVID-19 pandemic. As a result, customers are advised to keep an eye on their finances and plan their repayments accordingly.

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