Karur Vysya Bank (KVB) has announced a 10 basis points reduction in its Marginal Cost of Funds-Based Lending Rates (MCLR) across all tenors. According to reports from CNBCTV18.com, the overnight MCLR has been reduced from 8.90% to 8.80%, while the one-month and three-month tenors have both been lowered from 9.05% to 8.95%. The six-month and one-year MCLR have been cut from 9.20% to 9.10%. The new MCLRs will take effect on February 22, 2026, as communicated in the bank's official disclosure dated February 19, 2026.
The rate reduction will impact several key loan categories linked to this benchmark. As reported by CNBCTV18.com, loans such as corporate loans, business loans (non-MSME) and loans against property are all linked to the revised MCLR. This change will directly benefit borrowers in these segments who have taken loans at the previous rates. The bank has informed the National Stock Exchange of India Ltd and BSE Limited about the changes in compliance with applicable listing regulations.
Shares of Karur Vysya Bank Ltd ended at ₹318.60 on Thursday, down ₹7.40, or 2.27%, on the NSE, according to CNBCTV18.com. The disclosure was signed by Srinivasarao M, Company Secretary and Deputy General Manager. The bank stated that the revision reflects the prevailing cost of funds environment and has been undertaken in line with regulatory requirements and market conditions.
The MCLR calculation methodology includes multiple components that determine the final lending rate. According to the report, MCLR comprises the marginal cost of funds, negative carry due to the cash reserve ratio, operating costs, and tenor premium. This comprehensive approach ensures the rate reflects the bank's actual cost of funds and operational expenses.
