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Punjab National Bank and Bank of India cut MCLR rates by up to 15 bps from September 1, 2025, offering relief to borrowers even as Reserve Bank of India holds repo rate at 5.5%.
MCLR is the internal benchmark that banks use to determine interest rates on floating-rate loans such as housing, auto, and personal loans. (Representational Image)
Punjab National Bank (PNB) and Bank of India (BoI) have lowered their marginal cost of funds-based lending rates (MCLR), offering some relief to borrowers whose loans are linked to MCLR. The revised rates took effect from September 1, 2025, even as the Reserve Bank of India (RBI) kept the repo rate unchanged at 5.5% in its August monetary policy review.
Punjab National Bank
PNB has reduced its MCLR by up to 15 basis points (bps) across tenures. The overnight rate has been cut from 8.15% to 8%, while the one-month MCLR has come down from 8.30% to 8.25%. The three-month rate is down from 8.50% to 8.45%, the six-month from 8.70% to 8.65%, and the one-year from 8.85% to 8.80%. The three-year MCLR has also been reduced to 9.10% from 9.15%.
Bank of India
BoI has reduced MCLR rates by 5-15 bps across all tenures except the overnight rate, which remains unchanged at 7.95%. The one-month MCLR has been revised to 8.30% from 8.40%, while the three-month is down to 8.45% from 8.55%. The six-month rate has fallen to 8.70% from 8.80%, the one-year to 8.85% from 8.90%, and the three-year to 9% from 9.15%.
The move by both lenders follows a trend of selective easing by banks to remain competitive, despite RBI maintaining policy rates.
MCLR is the internal benchmark that banks use to determine interest rates on floating-rate loans such as housing, auto, and personal loans. A reduction in MCLR typically leads to lower EMIs for existing borrowers. However, fresh floating-rate loans are now linked to the External Benchmark Lending Rate (EBLR), though banks allow customers to switch from MCLR to EBLR.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
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