Mumbai: has increased its Marginal Cost of Funds based Lending Rate by five basis points across most tenors, effective October 15, 2026. The one-month benchmark remains unchanged, according to the bank’s announcement.
The revision raises overnight, three-month, six-month, one-year, two-year and three-year . Five basis points equal 0.05 percentage points, making the increase uniform across the affected categories.
Overnight Rate Rises To 7.95%
The overnight MCLR will increase from 7.90 per cent to 7.95 per cent.
The one-month MCLR will remain at 8.25 per cent, making it the only unchanged rate among the tenors listed in the announcement.
These figures represent lending benchmarks for their respective periods. The overnight and one-month categories therefore follow different outcomes under the revision.
Three-Month And Six-Month Benchmarks Increase
IOB has raised its three-month MCLR to 8.50 per cent from 8.45 per cent.
The six-month rate will move to 8.75 per cent, compared with the previous 8.70 per cent.
Both adjustments follow the same five-basis-point increase announced for most categories, with the revised benchmarks taking effect on October 15.
One-Year MCLR Set At 8.90%
The one-year lending benchmark will rise from 8.85 per cent to 8.90 per cent.
IOB’s two-year MCLR will also stand at 8.90 per cent following a five-basis-point increase. The three-year benchmark will reach 8.95 per cent after an equivalent adjustment.
The one-year and two-year rates will consequently be identical, while the three-year rate will remain five basis points higher.
What The Revision Means For Borrowers
MCLR is a benchmark used to price loans linked to this lending framework. A change in the benchmark should be distinguished from the final interest rate charged under a loan agreement.
For existing MCLR-linked borrowers, any change in their applicable rate depends on contractual reset dates and other loan terms.
The announcement specifies the revised benchmarks and effective date; it does not provide loan-specific interest rates or instalment changes for individual customers.