State-owned Indian Overseas Bank (IOB) on Friday (January 10) announced a revision in its marginal cost of funds-based lending rate (MCLR) following a review by its Assets and Liabilities Management Committee.
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“The Assets and Liabilities Management Committee of the Bank, in its meeting held on 10.01.2025, has reviewed the MCLR workings as on 08.01.2025 and increased MCLR by 5 bps for Three – Months, Six – Month and One Year tenor and by 10 bps for Two Year tenor,” Indian Overseas Bank said in a regulatory filing.
The increase, ranging from 5-10 basis points (bps), will apply to select tenures and come into effect on January 15, 2025. The revised MCLR rates are: Three-month tenure increased by 5 bps to 8.65% (from 8.60%), six-month tenure up by 5 bps to 8.90% (from 8.85%), one-year tenure raised by 5 bps to 9.10% (from 9.05%), and two-year tenure increased by 10 bps to 9.10% (from 9%).
Also Read: Bank of India increases loan rates by 5 bps across three tenures: Check details
The MCLR for other tenures, including overnight, one-month, and three-year rates, remains unchanged at 8.25%, 8.50%, and 9.15%, respectively.
What is MCLR and who is impacted?
MCLR, or marginal cost of funds-based lending rate, is the minimum interest rate below which banks cannot lend. Introduced by the Reserve Bank of India (RBI) in 2016, MCLR replaced the base rate system.
Borrowers with loans linked to MCLR will see changes in their loan EMIs when MCLR rates fluctuate. For those with loans taken before 2016, the base rate or benchmark prime lending rate (BPLR) still applies. When MCLR increases, EMIs for loans such as home, personal, and business loans also rise.
Shares of Indian Overseas Bank ended at ₹48.08, down by ₹2.01, or 4.01%, on the BSE.
(Edited by : Shoma Bhattacharjee)
