PNB-BOI: Good news for PNB and Bank of India account holders. In early September 2025, PNB and Bank of India have reduced interest rates on their loans. Both the banks have reduced MCLR (Marginal Cost Based Lending Rates), which will provide relief to customers taking home loans, car loans and personal loans. Let us tell you that the revised rates for both the banks will be effective from September 1, 2025.
Know the detail
Punjab National Bank (PNB) and Bank of India (BoI) have revised MCLR, bringing some relief to MCLR-linked borrowers. PNB has cut its MCLR by up to 15 basis points, while BoI has reduced rates by 5 to 15 basis points across all tenors except the overnight period. Both these banks have reduced their lending rates in September 2025 despite the Reserve Bank of India (RBI) keeping the repo rate unchanged at 5.5% in its monetary policy (MPC) meeting on August 6, 2025.
What is MCLR rate?
Let us tell you that MCLR is a benchmark rate that banks use to decide how much interest will be charged from customers on floating rate loans like home loans, personal loans or auto loans. When MCLR decreases, the EMI of the loan also decreases and the repayment burden on the borrower is reduced.
However, MCLR is no longer applicable on new loans. New floating rate loans are linked to EBLR (External Benchmark Lending Rate). Banks also have the option to shift old MCLR customers to EBLR if they want.
