There is good news for the individuals who hold accounts with PNB and BOI banks, as they have reduced their MCLR, resulting in accessibility of loans at affordable rates.
Saloni Kumari | Sep 2, 2025 |
Good News For Borrowers! Loans to Get Cheaper in September 2025; PNB, BOI Reduce Their MCLR Rates
There is good news for the individuals who hold accounts with Punjab National Bank (PNB) and Bank of India (BOI). As per the recent reports, PNB and BOI have reduced their marginal cost of funds-based lending rates (MCLR), resulting in accessibility of loans at affordable rates for those whose loans are linked to MCLR. Punjab National Bank (PNB) has reduced its MCLR by 15 basis points, while Bank of India (BOI) has cut its MCLR by 5 to 15 basis points. These changes are implemented on all tenures except for overnight tenures.
Only these two banks have made changes to their lending rates, effective in September 2025. However, in the monetary policy (MPC) meeting held on August 06, 2025, the Reserve Bank of India (RBI) did not decide to make any amendment to its repo rate (5.5%).
MCLR stands for Marginal Cost of Funds-Based Lending Rate. It is the minimum interest rate that a financial institution can charge on a loan, such as a home, personal, or automobile loan. Reduction in MCLR ultimately affects loan EMIs, which usually decline. This decreases the total amount borrowers need to pay. MCLR was first discovered by the Reserve Bank of India in 2016. The purpose of introducing it was to maintain transparency among commercial banks, the central bank and borrowers. Also, to ensure rate cuts are passed on to borrowers more swiftly. Borrowers are always allowed to change from MCLR to EBLR by banks.
Punjab National Bank (PNB) has reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) by 15 basis points (from 8.15% to 8%) for overnight tenures. The one-month MCLR has been lowered from 8.30% to 8.25% by PNB, while the three-month MCLR has been lowered from 8.50% to 8.45%. PNB has reduced its six-month MCLR from 8.70% to 8.65%, the one-year MCLR from 8.85% to 8.8%, and the three-year MCLR from 9.15% to 9.10%. The new rates were scheduled to take effect from September 1, 2025. Meaning, the rates have already come into effect. Individuals who were planning to take a loan, this is the best time for them.
PNB Lending Rates
| Tenure-wise MCLR | Existing w.e.f. 01.08.2025 | Revised w.e.f. 01.09.2025 |
| Overnight MCLR | 8.15% | 8.00% |
| 1 Month MCLR | 8.30% | 8.25% |
| 3 Month MCLR | 8.50% | 8.45% |
| 6 Month MCLR | 8.70% | 8.65% |
| 1 Year MCLR | 8.85% | 8.80% |
| 3 Year MCLR | 9.15% | 9.10% |
Bank of India (BOI) has reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) by 5 to 15 basis points. These reductions are applicable to all tenures except for overnight tenures. The new rates have been made effective from September 01, 2025.
The bank has not made any changes to its overnight MCLR (7.95%); however, it has lowered its one-month MCLR from 8.40% to 8.30%. Additionally, its three-month MCLR decreased from 8.55% to 8.45%. Similar to this, the bank has also reduced its six-month MCLR from 8.80% to 8.70%, one-year MCLR from 8.90% to 8.85% and three-year MCLR from 9.15% to 9.00%.
BOI Lending Rates
| Sl.No | Tenure-wise MCLR | Rate effective from 01.09.2025 |
| 1 | Overnight MCLR | 7.95% |
| 2 | 1 Month MCLR | 8.30% |
| 3 | 3 Month MCLR | 8.45% |
| 4 | 6 Month MCLR | 8.70% |
| 5 | 1 Year MCLR | 8.85% |
| 6 | 3 Year MCLR | 9.00% |
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