UCO Bank Adjusts Benchmark Lending Rates Effective July 10

KOLKATA, India — Public sector lender UCO Bank (NSE: UCOBANK) announced on Thursday, July 9, 2026, a structural revision across several of its primary benchmark lending rates. Following a comprehensive evaluation by the bank's Asset Liability Management Committee (ALCO), the state-owned financial institution raised its Marginal Cost of Funds Based Lending Rate (MCLR) for multiple tenors by 5 basis points while tweaking treasury bill and sovereign security yields. The changes are scheduled to become operationally effective on Friday, July 10, 2026, directly altering retail and corporate credit terms.

Multiple MCLR Tenors Bumped by 5 Basis Points

According to an official regulatory disclosure submitted to the BSE Limited and the National Stock Exchange of India Limited, UCO Bank's internal committee decided to increment lending margins for nearly all standard borrow-cycles while insulating immediate short-term capital pools. The overnight MCLR has been left untouched at 7.90%.

However, longer tenors will experience higher rates. The one-month MCLR moves from 8.15% up to 8.20%, and the three-month baseline edges from 8.40% to 8.45%. Crucially for consumer portfolios, the six-month MCLR increases to 8.70%, while the vital one-year MCLR—which acts as the baseline anchor for the majority of residential mortgages, personal auto loans, and long-term enterprise facilities—advances from 8.75% to 8.80%.

[UCO Bank MCLR Structural Adjustments — Effective July 10, 2026]
Overnight: 7.90%       ---->     7.90% (Unchanged)
One Month: 8.15%     ---->     8.20% (+5 bps)
Three Month: 8.40%   ---->    8.45% (+5 bps)
Six Month: 8.65%       ---->    8.70% (+5 bps)
One Year: 8.75%        ---->    8.80% (+5 bps)

Treasury and Government Security Rates Realigned

In parallel with the loan pricing increases, UCO Bank’s asset-liability desk recalibrated its alternative benchmark metrics linked directly to sovereign markets. The short-term three-month Treasury Bill Linked Lending Rate (TBLR) declined from 5.40% to 5.30%, matched by an identical 10 basis point drop in the six-month TBLR down to 5.50%. Conversely, the long-dated 12-month TBLR rose 5 basis points to settle at 5.80%.

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| Benchmark Category                   | Old Rate (%)  | New Rate (%)  |
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| Treasury Bill Rate (3-Month)        | 5.40%             | 5.30%              |
| Treasury Bill Rate (6-Month)        | 5.60%             | 5.50%              |
| Treasury Bill Rate (12-Month)      | 5.75%             | 5.80%              |
| UCO G-Sec Rate (1-Year)           | 6.00%             | 5.57%              |
| 10-Year G-Sec Annualized Yield  | 7.11%             | 6.85%              |
-----------------------------------------------------------------------------------------

The bank also registered a reduction in its one-year Government Security (G-Sec) metric, dropping from 6.00% to 5.57%. Furthermore, the annualized 10-year G-Sec yield-to-maturity (YTM) par yield dropped significantly, declining from 7.11% to 6.85%.

Consumer Impact and Core Policy Baselines

For retail borrowers, the 5 basis point increase across mid-to-long term MCLR limits means an incremental rise in interest outlays. Existing floating-rate borrowers tied to the one-year benchmark will see their Equated Monthly Installments (EMIs) adjust upward during their next scheduled contract reset window.

Importantly, the bank clarified that external retail indicators tied directly to the central bank's policy rates will remain steady. The Repo Linked Rate (RLR)—including both the UCO Float variant and the UCO Prime variant—is locked flat at 8.05% and 5.25% respectively. The older Base Rate remains unchanged at 9.60%, and the Benchmark Prime Lending Rate (BPLR) stays firmly at 14.25%.

[Unchanged Baseline Standards]
UCO Float RLR: 8.05% | UCO Prime RLR: 5.25% | Base Rate: 9.60%

Official Sources Section

The underlying adjustments, percentage yields, and structural changes detailed in this report are based on official compliance filings released by UCO Bank on July 9, 2026. The data reflects the explicit decisions of the bank’s Asset Liability Management Committee and was transmitted legally by the bank’s corporate secretary desk to major domestic financial exchanges.

Executive Statements

"We inform that the Bank's Asset Liability Management Committee (ALCO) has reviewed the Benchmark rates and decided for revision in rates. The revised MCLR, TBLR linked rates and G-Sec linked rates are effective from 10.07.2026. Other Benchmark rates viz. Repo Linked Rate, Base rate and BPLR rate remain unchanged."

— Vikash Gupta, Company Secretary, UCO Bank

Why It Matters

When a major state-backed lender adjustments its benchmark lending rates, it signals changing systemic liquidity conditions within the domestic banking sector. Incremental shifts upward in the MCLR help protect a bank's net interest margins (NIMs) against rising deposit collection costs, even as the stability of the underlying repo-linked indices ensures that central banking policy remains neutral for newly onboarded consumers.

Key Facts at a Glance

• Operational Timeline: The comprehensive adjustments across UCO Bank lending tables take effect on July 10, 2026.

• The MCLR Adjustments: Key lending parameters across one, three, six, and twelve-month tenors were increased by 5 basis points.

• The Exemptions: The short-term overnight borrowing mark was insulated and held flat at 7.90%.

• External Metric Sanctions: Primary consumer safeguards like the Repo Linked Rate and traditional Base Rates remain unchanged.

• Sovereign Yield Declines: Annualized corporate indicators like the 10-year G-Sec baseline declined sharply from 7.11% to 6.85%.

Frequently Asked Questions

How does an increase in the one-year MCLR affect current home loans?

Borrowers whose floating-rate bank loans are benchmarked directly to UCO Bank’s one-year MCLR will experience a marginal increase in interest rates once their loan hitting its next annual reset date.

Are all loans from UCO Bank getting more expensive?

No. Loans mapped directly to the Repo Linked Rate (RLR), old Base Rates, or the standard overnight MCLR remain unaffected, as those specific categories were held flat.

Where is UCO Bank’s primary finance department located?

The state-owned banking enterprise maintains its central corporate finance operations and executive head office at India Exchange Place in Kolkata, West Bengal.

Source: Company Disclosure to Stock Exchanges