South Indian Bank Revises One-Year MCLR to 9.75% Ahead of Lending Cycle Reset

Image Source: Business Upturn

South Indian Bank Ltd has announced a revision in its Marginal Cost of Funds Based Lending Rate (MCLR), with the oneyear MCLR set at 9.75%, effective June 20, 2025. The move comes as part of the bank’s periodic rate review and reflects evolving funding costs and liquidity conditions.

Revised MCLR Structure:

Overnight & OneMonth MCLR: 7.65% & 8.30%
ThreeMonth MCLR: 9.60%
SixMonth MCLR: 9.65%
OneYear MCLR: 9.75% (revised from 9.95%)

Impact on Borrowers:

The oneyear MCLR is the benchmark for most retail and corporate loans, including home and auto loans.
The revision could lower EMIs for new borrowers or those with floatingrate loans linked to MCLR.

Strategic Timing: The rate adjustment comes ahead of the quarterend lending cycle, allowing the bank to remain competitive amid a moderating interest rate environment.

Market Context: Several banks have begun finetuning lending rates in response to stable repo rates and improving liquidity, signaling a possible shift in credit cost dynamics.

Outlook:

The downward revision in the oneyear MCLR suggests South Indian Bank is aligning with broader market expectations of easing borrowing costs. This could support credit growth in retail and MSME segments, while enhancing the bank’s lending competitiveness.

Source: South Indian Bank Exchange Filing, CodeForBanks, PSU Connect