Loans becoming cheaper: Union Bank of India, Canara Bank

By Fatima | Published on June 14, 2025

Businesss / June 14, 2025

Loans becoming cheaper: Union Bank of India, Canara Bank

One of the significant aspects of the rate cutting spree that the banks have adopted following the jumbo Repo Rate cut of 50 basis points is that they are passing on the entire benefit to the customers.

Kolkata:

With Reserve Bank of India surprising the market with a massive 50-point cut of the Repo Rate on June 6, banks have started trimming their lending rates in right earnest. More than half a dozen major banks have already slashed lending rates.

Some are bringing down their RLLR (Repo Linked Lending Rate) by 50 basis points, which means they are passing on the entire benefit to their customers.

As of today, June 12, all the rates are applicable on loans sanctioned by the above-mentioned banks. It seems to be just a matter of time before other banks jump in.

Union Bank of India: This Public sector lender has also taken the decision to lower the Repo Rate linked interest rate by 50 basis points.

UCO Bank: This PSU bank has trimmed its RLLR by 50 bps that now starts from 8.3%. It has also cut MCLR across all tenures. It has decreased the one-month MCLR to 8.35% and the overnight lending rate to 8.15%, the three-month MCLR to 8.5%, six-month MCLR to 8.8% and one year MCLR to 9%.

Canara Bank: Canara Bank has announced a cut in RLLR by 50 basis points — from 8.75% to 8.25% following the RBI policy rate cut.

Indian Overseas Bank: This PSU bank, too, has cut its RLLR by the same 50 basis points for the benefit of its customers.

HDFC Bank: India’s biggest private sector bank has reduced MCLR (Marginal Cost of Funds-based Lending Rates) by 10 basis points across tenures. It will benefit those whose loans are linked to MCLR.

Karur Vysya Bank: This private sector bank has also reduced its MCLR-linked loan interest rate for six months by 10 bps to 9.8%, that on 1-year MCLR by 20 bps to 9.8%.

Reducing the lending rates will help banks to remain competitive. Before applying for a loan, most customers will scout the market for the lowest interest rates which will translate into the lowest EMIs for them. Retail loans are big business for all banks and they will try to lure customers with the lowest EMIs on home loans, personal loans, vehicle loans and student loans. Let’s have a look at the extent at which major banks have trimmed lending rates since June 6.