PNB, BOI Cut Loan Rates Up to 15 Bps From September

Punjab National Bank (PNB) and Bank of India (BoI) have reduced their Marginal Cost of Funds-Based Lending Rates (MCLR) effective September 1, 2025, providing relief to borrowers with MCLR-linked loans such as home, personal, and automobile loans. PNB cut its MCLR by up to 15 basis points across various tenures, with rates falling from 8.15% to 8% for overnight tenure and similar reductions for longer tenures. BoI reduced MCLR by 5 to 15 basis points for all tenures except the overnight rate, which remained unchanged. These reductions come despite the Reserve Bank of India (RBI) keeping its repo rate steady at 5.5% during the August 2025 monetary policy meeting. The MCLR is a benchmark interest rate that influences loan EMIs, and its reduction translates into lower repayment burdens for existing borrowers, though new floating rate loans are now linked to the External Benchmark Lending Rate (EBLR). This move follows similar rate cuts by other Indian banks earlier in the year, reflecting a broader trend of easing borrowing costs in response to RBI's monetary policy stance.