Archive · 12 Aug 2026
Bank of Baroda, Canara Bank Hike Rates; EMIs May Rise
Two big banks in India, Canara Bank and Bank of Baroda, have decided to make some loans more expensive.
They changed a number called MCLR, which is the lowest interest rate banks usually use for lending.
The new rates started on August 12, 2026.
This happened one week after the Reserve Bank of India kept its main interest rate steady at 5.25 percent.
People with home loans, car loans, or personal loans tied to MCLR may be affected.
Their monthly payments, called EMIs, could go up when their rate resets.
Sometimes banks keep the payment the same but instead extend the time you have to repay.
Loans based on other benchmarks, like the repo rate, will not be directly affected.
Canara Bank raised most of its rates a little, while Bank of Baroda changed only its three-month rate.
Borrowers should check their loan agreement to see if their payments will change.
Canara Bank and Bank of Baroda raised their MCLR on select tenures, effective August 12, 2026.
Canara Bank hiked MCLR by five basis points across most tenures, with rates now ranging from 7.95 percent to 9.10 percent.
Bank of Baroda raised only its three-month MCLR by 10 basis points, from 8.20 percent to 8.30 percent.
The hikes follow the RBI's August 5 decision to keep the repo rate unchanged at 5.25 percent.
Borrowers with MCLR-linked home, vehicle or personal loans may face higher EMIs or extended repayment periods on their next reset date, while repo-linked loans are not directly affected.
- Who
- Canara Bank and Bank of Baroda, affecting borrowers with MCLR-linked home, vehicle, and personal loans
- What
- The banks raised their Marginal Cost of Funds Based Lending Rates (MCLR) on select tenures, potentially making some loans costlier
- When
- August 12, 2026, about a week after the RBI's August 5 monetary policy meeting
- Where
- India (reported from Mumbai)
- Why
- The revised benchmark rates may increase EMIs or extend repayment periods for MCLR-linked borrowers; the hikes follow the RBI keeping the repo rate unchanged at 5.25 percent
- Banks
- Canara Bank, Bank of Baroda
- Effective date
- August 12, 2026
- RBI repo rate (unchanged Aug 5)
- 5.25 percent
- Canara Bank MCLR range
- 7.95% to 9.10%
- Canara Bank one-year MCLR
- 8.80%
- Bank of Baroda three-month MCLR
- 8.30% (up 10 basis points)
- Affected loans
- MCLR-linked home, vehicle, personal loans
- MCLR introduced
- By RBI in 2016