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Indian Overseas Bank Raises Lending Rates By 5 Basis Points Across Six Tenors
- •Indian Overseas Bank increased its Marginal Cost of Funds-based Lending Rate by 5 basis points across six tenors, effective October 15, 2026.
- •The overnight MCLR rose to 7.95 percent, the three-month rate increased to 8.50 percent, and the six-month rate went up to 8.75 percent.
- •The one-year and two-year MCLR rates increased to 8.90 percent each, while the three-year rate climbed to 8.95 percent.
- •The one-month lending rate remained unchanged at 8.25 percent following the revision.
- •The Chennai-based bank previously reported strong Q1 results with a 49 percent jump in net profit and improved asset quality.
Key Questions Answered
Effective October 15, 2026, Indian Overseas Bank raised its MCLR by 5 bps across six tenors: overnight at 7.95%, three-month at 8.50%, six-month at 8.75%, one-year and two-year at 8.90%, and three-year at 8.95%. The one-month rate remains unchanged at 8.25%.
For the quarter ending in June, Indian Overseas Bank reported a 34% year-on-year increase in net interest income to ₹3,688 crore and a 49% rise in net profit to ₹1,659 crore. Asset quality also improved as gross NPAs declined to 1.33% and net NPAs dropped to 0.18%.
MCLR stands for Marginal Cost of Funds-based Lending Rate, which is a benchmark used by banks to determine interest rates on certain loans. An increase in MCLR can raise borrowing costs for customers whose loans are linked to this benchmark, depending on their individual loan terms and reset dates.
