Indian Overseas Bank Trims Overnight Lending Rate

Indian Overseas Bank (

) has reduced its overnight marginal cost of funds-based lending rate (MCLR) by 5 basis points to 7.95%, effective January 15, 2026, following a review by its Asset Liability Management Committee on January 13, 2026. All other MCLR tenors remain unchanged, indicating a calibrated rather than broad-based easing in lending rates. ​ The bank’s MCLR structure now stands at 8.30% for one month, 8.40% for three months, 8.65% for six months, and 8.80% for one year, with the two-year rate also at 8.80% and the three-year at 8.85%. For borrowers, this implies that existing loans linked to non-overnight MCLR will largely see no change in interest cost, while fresh borrowing rates will typically fall in the 8.30%–8.85% range depending on tenure. ​ This move comes against the backdrop of ongoing government stake dilution through an Offer For Sale of up to 2% of the bank’s equity, with an additional 1% available via a greenshoe option. Disclaimer: This post is for informational purposes only and not a recommendation to buy or sell any securities. I, or my family, associates, or relatives, may have a financial interest in the securities mentioned.