Canara Bank cuts lending rate by 0.10% to 9.4% from April 1

New Delhi: Public sector Canara Bank on Thursday announced 0.10 percentage point reduction in its MCLR-based lending rate to 9.40 percent from April 1, making loans cheaper for consumers.

"The bank has revised its base rate (based on MCLR) from 9.50 percent to 9.40 percent, a reduction of 10 basis points (0.10 percent) with effect from April 1, 2017," an exchange filing by the bank said.

Canara Bank said all rupee loans and advances linked to the base rate will accordingly carry reduced rate of interest by 10 basis points.

Banks revise their lending rates which is based on base rate every month.

Marginal cost based lending rate (MCLR) was introduced into banking system in June 2016 that replaced base rate system for new borrowers.

It is calculated on marginal cost of borrowing and return on net worth for banks.

MCLR was introduced by RBI to ensure fair interest rates to borrowers as well as banks.

It also seeks to address RBI objective of expediting monetary policy transmission as also augmenting uniformity and transparency to calculate lending rates. MCLR rates are revised every month.

Stock of Canara Bank closed 0.38 percent up at Rs 303.20 on BSE.