If you are thinking of taking a loan from the Bank of India (BOI) or you already have a loan, then there is great news for you! The bank has announced a reduction of 5 basis points (0.05%) in its Marginal Cost of Funds-based Lending Rate (MCLR) rates for various tenures.
This reduction has come into effect from July 1, 2025. Its direct benefit will be available on the monthly installments (EMI) of home loan, personal loan, and other loans, which will reduce the burden on your pocket. This step has brought relief to millions of customers who were waiting for cheaper interest rates.
Direct benefit to customers
Bank of India informed Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in a regulatory report that now the Fixed Rate Spread (FRS) for retail loans will be 1.50%. Under this, the interest rate for fixed rate retail loans based on 3-year MCLR has been fixed at 10.65%. The final lending rate may vary according to the Credit Risk Premium (CRP), which depends on the credit profile of the customer.
No change in repo-based rate
Bank of India has clarified that there has been no change in its repo-based lending rate (RBLR). RBLR is used for some special loan categories. MCLR This reduction in interest rates is in line with the overall trend of interest rates in the banking system, where many banks have revised their rates based on liquidity conditions and funding costs. This shows that the Bank of India is active in providing better financial solutions to the market dynamics and customers.
Banks’ initiatives after the RBI
Experts say that after the Reserve Bank of India (RBI) cut the repo rate, many banks including Bank of India have reduced their lending rates. This is a positive sign that will make it cheaper for customers to take loans. This will not only attract new loan takers but will also reduce the monthly installments of customers with existing floating rate loans. This move can also help boost credit growth in the economy and encourage investment.