Indian Bank Trims Lending Rate: 1-Year MCLR Cut to 9.00% Signals Softer Credit Outlook

Indian Bank has revised its one-year Marginal Cost of Funds-Based Lending Rate (MCLR) to 9.00%, down from 9.05%, effective July 2, 2025. The move reflects a marginal easing in the bank’s cost of funds and could translate into slightly lower borrowing costs for retail and corporate customers with MCLR-linked loans.

 

The one-year MCLR serves as the benchmark for most consumer loans, including home and auto loans. This is the first downward revision by Indian Bank in over six months, signaling a cautious shift in its interest rate stance amid evolving liquidity conditions and competitive pressures in the lending market.

 

Key Highlights:

 

- Revised Rate: One-year MCLR reduced to 9.00% from 9.05%.

- Effective Date: Change implemented from July 2, 2025.

- Other Tenors Unchanged: Overnight to six-month MCLRs remain steady at 8.30% to 8.95%.

- Loan Impact: Borrowers with MCLR-linked floating rate loans may see marginal EMI relief at next reset.

- Strategic Context: Comes amid stable repo rate environment and softening deposit costs.

- Competitive Landscape: Aligns Indian Bank’s MCLR with peers like SBI and Canara Bank, which also hover around the 9% mark.

- Base Rate: Remains unchanged at 9.80%, applicable to legacy loans.

 

While the cut is modest, it signals Indian Bank’s intent to remain competitive in a tightening credit market and could prompt similar moves by other mid-tier lenders.

 

Sources: Indian Bank official site, CodeForBanks, Reserve Bank of India