Loan Relief Ahead: Canara Bank, Union Bank Ease Lending Rates After Repo Cut

Canara Bank and Union Bank trim lending rates pursuing RBI's 50 ground constituent repo complaint trim to 5.5%, effective June 2025.

In consequence to nan Reserve Bank of India's (RBI) caller monetary argumentation adjustment, Canara Bank and Union Bank of India person announced cuts successful their lending rates. This follows nan RBI's determination connected June 6, 2025, to little nan repo complaint by 50 ground points, bringing it down from 6% to 5.5%.

Canara Bank stated it would trim its Marginal Cost of Funds Based Lending Rate (MCLR) by 20 ground points crossed each indebtedness tenures, pinch nan changes taking effect from June 12, 2025. The MCLR serves arsenic a important benchmark for astir floating-rate loans, peculiarly older location and business loans. This simplification is expected to make loans much affordable for borrowers, easing their financial load and perchance expanding nan request for credit.

Union Bank of India has besides revised its lending rates. The slope adjusted its External Benchmark Lending Rate (EBLR) and Repo Linked Lending Rate (RLLR) by 50 ground points, mirroring nan RBI's argumentation complaint revision. These changes took effect connected June 11, 2025, making it easier for borrowers to negociate their indebtedness repayments. The EBLR and RLLR are straight linked to nan RBI's repo rate, meaning that immoderate changes successful nan repo complaint are quickly reflected successful these lending rates, frankincense providing contiguous alleviation to borrowers.

On June 6, 2025, nan Reserve Bank of India announced a astonishment simplification of 50 ground points successful nan repo rate, lowering it to 5.5% from its erstwhile level of 6%. Additionally, nan Cash Reserve Ratio (CRR) was reduced by 100 ground points.

This latest complaint trim marks a full alteration of 100 ground points since February this year. Governor Sanjay Malhotra stated that pinch nan accelerated simplification successful repo rates, nan Monetary Policy Committee (MPC) believes location is constricted scope for further argumentation adjustments to stimulate economical growth.

The RBI's complaint trim is portion of a broader monetary argumentation strategy, pinch nan Monetary Policy Committee having reduced liking rates by 100 ground points since February 2025. The caller adjustments successful lending rates by Canara Bank and Union Bank are anticipated to little nan load of Equated Monthly Instalments (EMIs) for some caller and existing borrowers crossed various indebtedness segments, including retail, home, auto, and individual loans. The simplification successful liking rates is besides expected to positively effect nan Micro, Small and Medium Enterprises (MSMEs), which often trust heavy connected slope loans for their operations.

This move by nan banks is expected to stimulate in installments demand, providing a much-needed boost to nan economy. As borrowers use from reduced liking rates, nan marketplace could spot accrued activity successful nan unit and MSME indebtedness sectors. The adjustments align pinch nan RBI's efforts to heighten economical maturation by making loans much affordable for consumers. With nan costs of borrowing decreasing, businesses whitethorn find it easier to put successful description and development, perchance starring to occupation creation and further economical benefits. 

Overall, nan coordinated efforts of nan RBI and these awesome banks purpose to create a much conducive situation for economical growth. By lowering lending rates, they are not only supporting existing borrowers but besides encouraging caller borrowers to participate nan market, thereby fostering a rhythm of maturation and stability. 

Published on: Jun 11, 2025 9:44 PM IST