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UCO Bank’s Asset Liability Management Committee (ALCO) has announced a revision in several key benchmark lending rates, effective August 10, 2025. These changes impact the Marginal Cost of Funds Based Lending Rate (MCLR) across all tenors, along with the Treasury Bill Linked Lending Rate (TBLR) and government securities linked rates. This revision is an important update for borrowers and depositors linked to UCO Bank’s lending products, reflective of evolving market conditions and internal cost structures.
Key Takeaway Summary
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The MCLR rates have been adjusted upwards slightly across all tenors ranging from overnight to one year.
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Certain TBLR rates have been revised, with minor upward and downward tweaks.
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UCO G-Sec linked rates have been marginally increased.
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Repo linked rates, Base Rate, and Benchmark Prime Lending Rate (BPLR) remain unchanged.
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The adjustments signify a calibrated response by UCO Bank to maintain competitiveness while reflecting funding costs.
MCLR Rate Changes: Understanding the New Lending Benchmarks
The Marginal Cost of Funds Based Lending Rate, or MCLR, is the internal benchmark that determines lending interest rates for various tenors. These rates influence loan products such as home loans, business loans, and personal loans. The revised MCLR rates of UCO Bank effective from August 10, 2025, are:
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Overnight: 8.15% (previously not specified in detail)
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One month: 8.35%
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Three month: 8.50%
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Six month: 8.75%
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One year: 8.95%
This structured rate adjustment suggests a modest rise aimed at aligning lending rates with current cost of funds and market dynamics. It is crucial for borrowers to recognize that these revised rates will directly affect loan EMIs linked to these benchmarks, especially for those on floating rate loans.
Revisions in Other Benchmark Rates
Apart from MCLR, UCO Bank has also refined several other key benchmark interest rates:
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Treasury Bill Linked Lending Rate (TBLR):
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3 month rate decreased slightly from 5.40% to 5.35%
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6 month rate remains steady at 5.50%
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12 month rate increased slightly from 5.50% to 5.55%
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UCO G-Sec Rate (1 year) edged up from 5.60% to 5.64%
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The 10-year G-Sec Rate Yield to Maturity (YTM) also moved mildly upward from 6.44% to 6.51%
These nuanced movements in TBLR and G-Sec linked rates reflect sensitivity to government securities market trends and liquidity costs, which are critical components in the bank’s lending rate formulation.
Rates Remaining Unchanged: Stability in Certain Benchmarks
UCO Bank has maintained stability in several important rate benchmarks, which indicates a selective approach to rate revisions:
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Repo Linked Rate – UCO Float: 8.30%
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Repo Linked Rate – UCO Prime: 5.50%
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Base Rate: 9.60%
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Benchmark Prime Lending Rate (BPLR): 14.25%
These unchanged rates offer continuity for some loan segments and provide predictability in borrowing costs for customers linked to these benchmarks.
Impact and Implications for Customers
The revisions reflect UCO Bank’s response to the financial environment, balancing the need to manage borrowing costs while remaining competitive. Borrowers with floating rate loans indexed to MCLR and other benchmarks should anticipate changes in their interest outgo and EMIs consequent to the revised rates.
Depositors and investors should note that while lending rates have shifted, deposit rate benchmarks such as the Base Rate remain steady, and hence the overall interest landscape is balanced to support both lending and deposit functions. Customers are advised to reach out to the bank for product-specific impact assessments.
Official Disclosure and Transparency
UCO Bank has officially communicated these changes to the National Stock Exchange of India Ltd. and BSE Limited, ensuring transparency and regulatory compliance. This announcement aligns with the bank’s periodic review process by its ALCO, underlining prudent risk and asset-liability management practices.
In conclusion, the August 2025 benchmark rate revision by UCO Bank signals a moderate recalibration of lending rates tuned to cost of funds and market conditions, affecting a broad spectrum of loan products. Staying informed of these changes can assist customers in effective financial planning and loan management.
Source: UCO Bank official communication to NSE and BSE, ScanX Trade News
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