State-run Canara Bank has revised interest rates downwards on the vehicle loans sanctioned on or after August 1, 2009.

According to the new scheme, the bank will offer auto loans at a fixed interest rate of 8.50 percent for the first year and at 9.50 percent for next two year. Subsequently, the rate of interest will be reset to 10 percent for the third year, and up the fifth year.

The rate of interest for period above 60 months would be 10.50 percent.

The auto loans of the lender increased by a 26 percent to Rs 1,200 crore for the quarter ended June 30, 2009, as compared to the corresponding quarter of the last fiscal.

However, the growth during the June quarter of 2009 was around 8 percent as compared to the previous (March 2009) quarter.

The benchmark lending rate of the bank is currently pegged at 12 percent.

Can Fin Homes Ltd (CFHL), the housing finance venture of the bank also lowered its lending rates downwards for its new home loan borrowers. The new rates came into effect 1 August 2009 onwards.