Union Bank, Canara Bank, IOB cut lending rates by 50 bps after RBI move

Following a 50 bps policy rate cut by RBI, Union Bank revises its external benchmark lending rate, easing loan costs for retail and MSME borrowers

Union Bank of India, Canara Bank, and Indian Overseas Bank have reduced their external benchmark lending rate (EBLR) by 50 basis points after the Reserve Bank of India (RBI) announced a 50 bps cut in the policy rate last Friday. 

 

Retail loans and loans to the micro, small and medium enterprise (MSME) sector are linked to the external benchmark lending rate.

 

Following the cut, Canara Bank and Union Bank’s repo-linked lending rate (RLLR) will stand at 8.25 per cent, while Indian Overseas Bank’s will be at 8.35 per cent. 

 

“This move will lower borrowing costs for customers with loans linked to the RLLR. Depending on their loan terms, customers may benefit from reduced equated monthly instalments (EMIs) or a shorter loan tenure,” Canara Bank said in a press release.

 

The revised rates for Union Bank of India have come into effect from 11 June, while those for Canara Bank and Indian Overseas Bank will take effect from 12 June.

 

“With this move, Union Bank of India has completely aligned its EBLR and RLLR with the recent RBI rate cut, which will be beneficial to new and existing retail (home, vehicle, personal, etc.) and MSME borrowers,” Union Bank said.