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4w ago

Public Sector Banks Lower Lending Rates Again After RBI Holds Repo Rate

Monthly ALCO reviews at three leading public-sector lenders cut MCLR by up to 35 basis points to extend borrower relief.

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Overview

  • Indian Overseas Bank’s ALCO approved a 10-basis-point reduction in MCLR across all tenors, taking its one-year rate to 8.90% and its overnight rate to 8.05%, effective August 15.
  • State Bank of India trimmed its MCLR by 5 basis points across all maturities, lowering the one-year benchmark to 8.75% from August 15.
  • Bank of Baroda implemented selective cuts from August 12, slashing its one-month MCLR by 35 basis points to 7.95% and reducing other tenors by 10–15 basis points.
  • After the RBI held the repo rate at 5.55% in its August policy meeting, banks have used internal monthly reviews to continue passing through earlier rate cuts into lending rates.
  • Borrowers linked to both MCLR frameworks and external benchmark loans are now seeing small monthly savings that accumulate over the life of their loans.