Home loan EMIs to drop? Big banks like SBI, HDFC Bank, PNB, Bank of Baroda, IOB cut lending rates in August 2025; check bank wise list
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Synopsis
Several public and private banks have revised their marginal cost of funds-based lending rates following the RBI's monetary policy meeting in August.
By Sneha Kulkarni, ET Online
Several leading banks, including State Bank of India (SBI), Bank of Baroda, HDFC Bank, and Indian Overseas Bank, both state-owned and private lenders, have revised their marginal cost of funds-based lending rates (MCLR) following the Reserve Bank of India's (RBI) August monetary policy meeting. The changes, scheduled to be implemented in early to mid-August 2025, will impact borrowers with loans linked to MCLR, potentially resulting in shorter loan terms or lower equated monthly instalments (EMIs).
The marginal cost of funds-based lending rate, or MCLR, serves as a benchmark rate for banks to determine the interest rates on various floating-rate loans, such as home, personal, and automobile loans. A decrease in MCLR indicates a possible decline in EMIs for loans or a shorter loan tenure, which benefits borrowers in the long term. MCLR does not apply to new loans, as new floating-rate loans are linked to the External Benchmark Lending Rate (EBLR). Banks provide borrowers with the options to transition from MCLR to EBLR.
Also read: HDFC Bank cuts lending rates on these tenures by up to 5 bps: Check latest loan rates
After the revision, the bank's MCLR ranges between 8.05% and 8.90%. The new rates are effective from August 15, 2025.
Overnight MCLR: Reduced from 8.15% to 8.05%
One-Month MCLR: Reduced from 8.4% to 8.3%
Three-Month MCLR: Reduced from 8.55% to 8.45%
Six-Month MCLR: Reduced from 8.8% to 8.7%
One-Year MCLR: Reduced from 9% to 8.9%
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What is MCLR?
The marginal cost of funds-based lending rate, or MCLR, serves as a benchmark rate for banks to determine the interest rates on various floating-rate loans, such as home, personal, and automobile loans. A decrease in MCLR indicates a possible decline in EMIs for loans or a shorter loan tenure, which benefits borrowers in the long term. MCLR does not apply to new loans, as new floating-rate loans are linked to the External Benchmark Lending Rate (EBLR). Banks provide borrowers with the options to transition from MCLR to EBLR.SBI lending rates
State Bank of India, the country's largest state-owned lender, has reduced its marginal cost of funds-based lending rate (MCLR) on certain tenures, even as the Reserve Bank of India (RBI) kept the repo rate unchanged in its August Monetary Policy Committee (MPC) meeting. SBI has cut the rates by up to 5 basis points (bps). The revised rates are applicable from August 15, 2025. After the revision, the bank MCLR now ranges from 7.9% to 8.85% compared to the previous range of 7.95% to 8.9%.| Tenor | Existing MCLR (In %) | Revised MCLR (In %) |
| Over night | 7.95 | 7.9 |
| One Month | 7.95 | 7.9 |
| Three Month | 8.35 | 8.3 |
| Six Month | 8.7 | 8.65 |
| One Year | 8.8 | 8.75 |
| Two Years | 8.85 | 8.8 |
| Three Years | 8.9 | 8.85 |
Bank of Baroda lending rates
State-owned Bank of Baroda has revised its marginal cost of funds-based lending rates (MCLR) effective August 12, 2025. The overnight MCLR has been reduced from 8.10% to 7.95%, while the one-month MCLR has dropped from 8.30% to 7.95%. The three-month MCLR has been cut from 8.5% to 8.35%, the six-month MCLR from 8.75% to 8.65%, and the one-year MCLR from 8.9% to 8.8%.ADVERTISEMENT
| No. | MCLR Benchmark | MCLR in (%) w.e.f 12.08.2025 |
| 1 | Overnight MCLR | 7.95 |
| 2 | 1 Month MCLR | 7.95 |
| 3 | 3 Month MCLR | 8.35 |
| 4 | 6 Month MCLR | 8.65 |
| 5 | 1 Year MCLR | 8.8 |
Canara Bank lending rates
Public sector lender Canara Bank kept its lending rates unchanged. Its overnight MCLR now stands at 7.95%, and its one-month MCLR at 8%. The bank's three-month MCLR is now 8.20%, while the six-month MCLR is 8.55%. The one-year MCLR stands unchanged at 8.75%. Similarly, the two-year and three-year MCLR stand at 8.90% and 8.95%, respectively. The new rates are effective from August 12, 2025.ADVERTISEMENT
HDFC Bank lending rates
After revision, HDFC Bank's MCLR now ranges from 8.55% to 8.75%, depending on the loan tenure. The new rates are applicable from August 7, 2025. The bank changed MCLR after the August RBI policy meeting.Also read: HDFC Bank cuts lending rates on these tenures by up to 5 bps: Check latest loan rates
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Punjab National Bank lending rates
Punjab National Bank (PNB) has reduced its MCLR by 5 basis points (bps) on all tenures. The overnight MCLR has been reduced from 8.2% to 8.15%, the one-month MCLR from 8.35% to 8.3%, and the three-month MCLR from 8.55% to 8.5%. The six-month MCLR has come down from 8.75% to 8.7%, the one-year MCLR from 8.9% to 8.85%, and the three-year MCLR from 9.2% to 9.15%. The new rates are effective from August 1, 2025. Note that PNB reduced its lending rate before the August RBI policy meeting.| MCLR W.E.F. 01-08-2025 | ||
| MCLR TENOR | Existing w.e.f. 01.07.2025 | Revised w.e.f. 01.08.2025 |
| Overnight | 8.20% | 8.15% |
| One month | 8.35% | 8.30% |
| Three month | 8.55% | 8.50% |
| Six month | 8.75% | 8.70% |
| One year | 8.90% | 8.85% |
| Three years | 9.20% | 9.15% |
Indian Overseas Bank lending rates
After the revision, the bank's MCLR ranges between 8.05% and 8.90%. The new rates are effective from August 15, 2025.
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Overnight MCLR: Reduced from 8.15% to 8.05%
One-Month MCLR: Reduced from 8.4% to 8.3%
Three-Month MCLR: Reduced from 8.55% to 8.45%
Six-Month MCLR: Reduced from 8.8% to 8.7%One-Year MCLR: Reduced from 9% to 8.9%
Latest lending rates of top banks in August 2025
| SBI | Aug 15, 2025 | 7.90% – 8.85% | Reduced by up to 5 bps |
| Bank of Baroda | Aug 12, 2025 | 7.95% – 8.80% | Reduced by 10–35 bps |
| Canara Bank | Aug 12, 2025 | 7.95% – 8.95% | No change |
| HDFC Bank | Aug 7, 2025 | 8.55% – 8.75% | Reduced slightly |
| PNB | Aug 1, 2025 | 8.15% – 9.15% | Reduced by 5 bps |
| Indian Overseas Bank | Aug 15, 2025 | 8.05% – 8.90% | Reduced by 10 bps |
