Chennai, January 13, 2026 – Indian Overseas Bank (BSE: 532388 | NSE: IOB) has announced a reduction in its Overnight Marginal Cost of Funds Based Lending Rate (MCLR) by 5 basis points, bringing it down to 7.95 percent, effective January 15, 2026.
The revision follows a review of the bank’s lending rate framework by its Asset Liability Management Committee (ALCO), based on the MCLR workings as of January 10, 2026. The move is expected to provide marginal relief to borrowers with overnight-linked loans, while lending rates across longer tenors remain unchanged.
Revised MCLR Structure
| Tenor | Existing MCLR (%) | Change | Revised MCLR (%) |
|---|---|---|---|
| Overnight | 8.00 | Reduced by 5 bps | 7.95 |
| One Month | 8.30 | No change | 8.30 |
| Three Month | 8.40 | No change | 8.40 |
| Six Month | 8.65 | No change | 8.65 |
| One Year | 8.80 | No change | 8.80 |
| Two Year | 8.80 | No change | 8.80 |
| Three Year | 8.85 | No change | 8.85 |
Impact on Borrowers
The reduction applies exclusively to overnight MCLR-linked loans, which typically include short-term corporate borrowings and select working capital facilities. Borrowers linked to one-month and longer tenor MCLRs will see no immediate change in their interest rates.The calibrated adjustment indicates a targeted approach, aligning short-term lending costs with prevailing funding conditions while maintaining stability across medium- and long-term loan products.
About the Company
Indian Overseas Bank is a public sector bank listed on both the BSE and NSE, with a nationwide presence across retail, corporate, MSME, and international banking segments. The bank continues to focus on balance sheet optimisation, credit growth, and prudent interest rate management in line with evolving market conditions.Source:
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