Punjab National Bank Cuts Marginal Cost Of Funds-Based Lending Rate By 5 Basis Points Across All Loan Tenures

Punjab National Bank cut its Marginal Cost of Funds-based Lending Rate by 5 basis points across all loan tenures. From July 1 2025, the new rates took effect.

The minimum interest rate below which banks cannot lend is known as MCLR. Home, auto, and personal loan interest rates are affected. These come under the floating-rate loans. It is linked to a bank's cost of funds.

With floating-rate loans linked to MCLR, a lower MCLR translates into reduced EMIs for borrowers. Home Loan borrowers, customers with loans linked to MCLR may benefit from this rate cut.

Once a year, for many loan agreements, the benefit may be passed on only after the reset period. The MCLR tenure rate for Overnight is 8.20%. One month's new rate is 8.35%, the new rate for three months is 8.55%, and six months is 8.75%. One year is 8.90% and three years is 9.20%.

The benchmark for most home loans, the one-year MCLR, has been cut from 8.95% to 8.90%. On June 1, 2025, PNB last revised its MCLR rates. Amid evolving market conditions, this move is aimed at boosting credit demand and supporting retail borrowers.

Effective from July 7, Indian Bank said that it will waive charges for non-maintenance of minimum balance across all savings accounts. The state-owned lender said the decision would benefit students, senior citizens, small business owners, and rural account holders.

“This customer-first initiative, effective from July 1, 2025, is particularly aimed at supporting priority segments such as women, farmers and low-income households, ensuring easier and more inclusive access to banking services without the stress of balance maintenance penalties,” the PSU bank said.

To make credit more affordable, the One-year MCLR has been reduced by 5 basis points to 9.00%, effective July 3, 2025. The rate cut is expected to lower borrowing costs for retail and corporate loan customers.