Kotak Mahindra Bank Trims 1-Year MCLR to 8.75%: Borrowers Set to Cheer from July 16

Kotak Mahindra Bank cut its one-year Marginal Cost of Funds Based Lending Rate (MCLR) to 8.75% from July 16, 2025. This is one of the broader interest rate reductions in the banking sector and is a move towards making loans more affordable to customers as well as stimulating credit growth in the face of a changing economic landscape.

 

Key Highlights

1-Year MCLR at 8.75%: The new rate, effective from July 16, reduces the cost of borrowing home loans, personal loans and other credit products with 1-year MCLR basis.

 

Part of Wider Rate Revision: Kotak Mahindra Bank has been periodically revising its MCLR and fixed deposit (FD) rates consistently over the last few months in line with changing market conditions and RBI rate actions.

 

Fixed Deposits Also Repriced: The bank slashed rates on FDs earlier in the year by up to 50 basis points for certain tenors—a move that benefits borrowers but reduces depositors' yields by a marginal amount.

 

Market Impact: The revised MCLR places Kotak competitively in the private bank segment, with the rates aligning with peers HDFC and Axis Bank.

 

Customer Centricity: Reduced MCLR benefits new borrowers and reset date holders post-July 16 with lower EMIs and improved household cash flows.

 

The borrowers need to check their loan reset dates and seek chances to refinance or renegotiate interest rates, especially for floating-rate loans that are linked to the MCLR.

 

Source:

Kotak Mahindra Bank, , MyMoneyMantra, Economic Times, CNBC TV18