Overview

• Indian Overseas Bank’s ALCO approved a 10 basis point reduction in its Marginal Cost of Funds Based Lending Rate across all tenors on July 14, 2025, taking effect July 15 and lowering the one-year rate to 9.00%.
• State Bank of India trimmed its MCLR by up to 25 basis points across all loan maturities, also effective July 15, with its one-year rate now at 8.80%.
• These moves follow IOB’s 50 basis point cut to its Repo Linked Lending Rate on June 12 and the RBI’s unanimous 50 basis point repo rate reduction to 5.50% earlier this month.
• Banks rely on MCLR and Repo Linked Lending Rate benchmarks to price floating-rate loans, making these adjustments vital for transmitting policy rate changes to customers.
• The latest reductions aim to bring down EMIs and overall borrowing costs and sustain credit growth in retail, housing and SME segments.