Indian Overseas Bank Cuts MCLR Rates by 50 Basis Points

In a move set to benefit retail borrowers, Indian Overseas Bank (IOB) has announced a reduction in Marginal Cost of Funds Based Lending Rates (MCLR) across various tenures. The bank issued a statement on Wednesday confirming that the revised MCLR rates are effective immediately.

Asset Liability Committee Reviews Rates

The decision was taken during the bank’s Asset Liability Management Committee (ALCO) meeting held on July 14, 2025. Following a thorough review, the committee recommended a cut of average 50 basis points across different MCLR tenures to support retail credit growth.

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Revised MCLR Rates Effective Immediately

According to the bank’s official website, here are the revised MCLR rates:

• Overnight MCLR: Reduced from 8.25% to 8.15%
• 1-Month MCLR: Reduced from 8.50% to 8.40%
• 3-Month and 6-Month MCLR: Each cut by 10 basis points
• 1-Year MCLR: Key rate influencing retail loans, dropped from 9.10% to 9.00%

Retail Loans to Become More Affordable

This rate cut will directly benefit customers availing loans in the retail segment—especially those seeking home loans, personal loans, and vehicle loans. The lower interest burden is expected to enhance demand and provide relief to existing and new borrowers alike.

Positive Move for Borrowers

With this MCLR reduction, Indian Overseas Bank joins the list of PSU banks easing interest rates to encourage borrowing amidst a competitive financial environment. The move is expected to boost consumer sentiment and support broader economic activity.