PNB, Bank of India reduce lending rates in September 2025: Check revised MCLR rates here

Punjab National Bank (PNB) and Bank of India (BoI) have revised their marginal cost of funds-based lending rates (MCLR), bringing some relief to borrowers whose loans are linked to MCLR. PNB has cut its MCLR by up to 15 basis points, while BoI has lowered rates by 5 to 15 basis points across all tenures except the overnight tenure. The revised rates for both lenders take effect from September 1, 2025. Despite the Reserve Bank of India (RBI) keeping the repo rate unchanged at 5.5% in its August 6, 2025, monetary policy (MPC) meeting, these two banks have lowered their lending rates in September 2025.

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. A decrease in MCLR indicates a possible decline in loan EMIs, which lowers a borrower’s loan repayment amount. 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 option to transition from MCLR to EBLR.

Also read: Bank holidays in September 2025: Check when banks are closed in September, 2025; State wise list

PNB cuts MCLR rates

Punjab National Bank has reduced marginal cost of lending rates by up to 15 bps on its overnight tenure. The overnight MCLR has been reduced from 8.15% to 8%. The bank has cut its one-month MCLR from 8.30% to 8.25%, while it has reduced the three-month MCLR from 8.50% to 8.45%. The bank’s six-month MCLR has come down from 8.70% to 8.65%, the one-year MCLR from 8.85% to 8.8%, and the three-year MCLR from 9.15% to 9.10%. The new rates are effective from September 1, 2025.

PNB lending rates

MCLR TENOR	Existing w.e.f. 01.08.2025	Revised w.e.f. 01.09.2025
Overnight	8.15%	8.00%
One month	8.30%	8.25%
Three month	8.50%	8.45%
Six month	8.70%	8.65%
One year	8.85%	8.80%
Three years	9.15%	9.10%

Source- PNB website

Bank of India

Bank of India has reduced MCLR rates across all tenures by 5 to 15 basis points, except for the overnight tenure which remains unchanged. The new rates are effective from September 1, 2025.

The bank has kept the overnight MCLR unchanged at 7.95%, but it has cut the 1-month MCLR from 8.40% to 8.30%. The lender has also cut the 3-month MCLR from 8.55% to 8.45%. Similarly, Bank of India has reduced the 6-month MCLR from 8.80% to 8.70%. It has revised its 1-year MCLR from 8.90% to 8.85%, while the bank has also slashed its 3-year MCLR from 9.15% to 9.00%.

Bank of India lending rates

Sl.No	Tenor wise MCLR	Rate effective from 01.09.2025
1	Overnight MCLR	7.95%
2	1 Month MCLR	8.30%
3	3 Month MCLR	8.45%
4	6 Month MCLR	8.70%
5	1 Year MCLR	8.85%
6	3 Year MCLR	9.00%

Source- Bank of India website