State-owned Canara Bank on Thursday afternoon that it has reduced its marginal cost of fund-based lending rate (MCLR) by up to 30 basis points across various tenors. According to the bank’s press release the new lending rates will be effective from August 7.

With this latest cut, the bank aims to reduce the burden on borrowers.

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The overnight and one-month lending rates have been cut by 20 basis points (bps) to 7 per cent each. The three-month MCLR has been revised to 7.15 per cent from 7.45 per cent, Canara Bank said in a regulatory filing.

It further said that the six-month MCLR has been cut to 7.40 per cent from 7.50 per cent, the bank said. The one-year MCLR has been revised to 7.45 per cent from 7.55 per cent earlier.

Earlier in the day, the Reserve Bank of India (RBI) maintained the repo rate or short-term lending rate for commercial banks, at 4 per cent. The reverse repo rate has also been maintained at 3.35 per cent.

However, the central bank maintained an accommodative stance, which could continue until the economy is fully revived, thus opening up possibilities for more future rate cuts.

Keeping the economic stress caused by the pandemic, the Reserve Bank of India also decided to permit a one-time restructuring of corporate loans.