There is positive news for account holders of Punjab National Bank (PNB) and Bank of India (BoI). In early September 2025, both banks have reduced their loan interest rates, making it easier for customers to manage home loans, car loans, and personal loans. The revised rates for both banks are effective from September 1, 2025.
Details of the Rate Cut
Both PNB and BoI have revised their Marginal Cost Based Lending Rates (MCLR), providing relief to borrowers linked to these rates. PNB has cut its MCLR by up to 15 basis points, while BoI has reduced its MCLR by 5 to 15 basis points across all tenors except the overnight period. Notably, these cuts come even though the Reserve Bank of India (RBI) kept the repo rate unchanged at 5.5% during its monetary policy committee (MPC) meeting on August 6, 2025.
What is the MCLR Rate?
MCLR is a benchmark rate used by banks to determine the interest charged on floating rate loans such as home loans, personal loans, and auto loans. When the MCLR goes down, the EMI for loans also decreases, reducing the overall repayment burden for borrowers.
However, MCLR is no longer applicable for new loans, as new floating rate loans are now linked to the External Benchmark Lending Rate (EBLR). Banks also offer the option for existing MCLR customers to shift to the EBLR if they prefer.
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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