In May 2025, several Indian banks adjusted their Marginal Cost of Funds-Based Lending Rates (MCLR), impacting loan interest rates and Equated Monthly Installments (EMIs) for borrowers. These changes reflect the banks’ responses to evolving economic conditions and the Reserve Bank of India’s (RBI) monetary policy decisions.
1 / 4Bank of Baroda reduced its one-year MCLR by 5 basis points, bringing it down from 9.00% to 8.95%, effective May 12, 2025. Other tenures, including overnight, one-month, three-month, and six-month MCLRs, remain unchanged. The overnight rate stands at 8.15%, while the six-month rate remains at 8.80%. The one-year MCLR is the most commonly used benchmark for home and auto loans, and the reduction is likely to offer slight EMI relief to borrowers.
2 / 4Canara Bank reduced its MCLR selectively, with a 5 basis point cut in the overnight tenor, now at 8.30%. The two-year MCLR was also lowered by 10 basis points to 9.25%. However, other tenures were left unchanged.
3 / 4Punjab National Bank announced a broader reduction in lending rates across all tenures, also effective from May. The overnight MCLR dropped by 15 basis points to 8.25%, while the one-month and three-month rates were cut by 10 basis points each. The bank’s one-year MCLR, a key reference for most consumer loans, was brought down from 9.05% to 8.95%. PNB also lowered its three-year MCLR from 9.35% to 9.25%.
4 / 4HDFC Bank announced a reduction in its Marginal Cost of Funds-based Lending Rates (MCLR) by up to 15 basis points across select loan tenures. Following the revision, effective from May 7, 2025, HDFC Bank’s MCLR now ranges between 9.00% and 9.20%, depending on the loan tenure. This is a decrease from the previous range of 9.10% to 9.35% that was applicable in April 2025.
