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SBI and Indian Overseas Bank have reduced their MCLR rates effective August 15, 2025. SBI’s one-year MCLR is now 8.75%.
SBI revises MCLR rate from Aug 15.
SBI Cuts MCLR Rate: The State Bank of India (SBI), the country’s largest lender, has announced a 5 basis points (bps) reduction in its Marginal Cost of Funds-Based Lending Rate (MCLR) across all tenors, effective August 15, 2025.
Following the cut, the overnight and one-month MCLR stand reduced to 7.90% from 7.95%, while the three-month rate is revised to 8.30% from 8.35%. The six-month MCLR has been lowered to 8.65% from 8.70%, and the one-year rate, which serves as the benchmark for many consumer loans, has been reduced to 8.75% from 8.80%. The two-year MCLR now stands at 8.80% and the three-year rate at 8.85%, both down from their previous levels.
| Tenor | Existing MCLR (In %) | Revised MCLR (In %) |
|---|---|---|
| Over night | 7.95 | 7.90 |
| One Month | 7.95 | 7.90 |
| Three Month | 8.35 | 8.30 |
| Six Month | 8.70 | 8.65 |
| One Year | 8.80 | 8.75 |
| Two Years | 8.85 | 8.80 |
| Three Years | 8.90 | 8.85 |
The move comes close on the heels of the Reserve Bank of India’s (RBI) recent policy decision to keep the repo rate unchanged at 5.55 per cent in August MPC meeting, with “neutral” stance. RBI’s status quo on the benchmark lending rate came following three rate cuts of 50 and 25 twice in previous MPC meetings.
For home loan borrowers, the reduction in the one-year MCLR, widely used as the benchmark, means a modest decline in equated monthly installments (EMIs). For example, on a Rs 30 lakh home loan with a 20-year tenure, the EMI reduction could be in the range of Rs 90–100 per month, offering some relief to households.
In the other news, Indian Overseas Bank also reduced its MCLR for all tenors by 10 bps from August 15, 2025.
The Asset Liability Management Committee (ALCO) of Indian Overseas Bank, in its meeting on August 11, 2025, announced a 10-basis point reduction in the Marginal Cost of Funds-based Lending Rate (MCLR) across all tenors. The revised rates are effective from August 15, 2025.
Under the new structure, the overnight MCLR has been reduced from 8.15% to 8.05%, while the one-month rate will stand at 8.30% compared to 8.40% earlier. The three-month MCLR will come down to 8.45% from 8.55%, and the six-month rate will be 8.70%, down from 8.80%. The one-year MCLR — often used as a benchmark for home loans — will now be 8.90%, compared to 9.00% previously.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
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