Outlook Business Desk
Bank of Baroda and Canara Bank have reduced the Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points. This could lower Equated Monthly Instalments (EMIs) on floating-rate home, auto, or personal loans.
The Marginal Cost of Funds-based Lending Rate (MCLR) is a benchmark banks use to set interest rates for floating-rate loans such as home, auto, and personal loans. A reduction in MCLR can lower EMIs or shorten the loan tenure, offering long-term benefits to borrowers.
Bank of Baroda has reduced the MCLR by 5 basis points only for the overnight tenure, bringing it down from 8.15% to 8.10%. MCLR rates for other tenures remain unchanged: one-month at 8.30%, three-month at 8.50%, six-month at 8.75%, and one-year at 8.90%. The revised rates are effective from 12 July 2025.
In a press release last week, Bank of Baroda has lowered its home loan interest rate to 7.45% per annum and removed the processing fee. This will reduce borrowing costs for customers as policy rates continue to fall.
Public sector lender Canara Bank has reduced its MCLR by 5 basis points across all major loan tenures. The revised lending rates came into effect on 12 July 2025 and may lower EMIs for borrowers.
Canara Bank’s overnight MCLR now stands at 7.95%, while the one-month rate is 8.00%. For 3, 6, and 12 months, the rates are 8.20%, 8.55%, and 8.75%. Two- and three-year rates are 8.90% and 8.95%, respectively.
HDFC Bank has reduced its Marginal Cost of Funds-based Lending Rates (MCLR) by up to 30 basis points on select tenures. This move will benefit borrowers with floating-rate loans linked to MCLR.
Punjab National Bank (PNB), the country’s second-largest public sector lender, has cut its Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points across all tenures, easing borrowing costs for those with floating-rate loans.
Indian Bank has lowered its Marginal Cost of Funds-based Lending Rates (MCLR) by 5 basis points across multiple tenures. The revised rates came into effect on 3 July 2025, easing loan repayment for borrowers.