Indian Overseas Bank cuts overnight MCLR by 5 bps

State-run lender Indian Overseas Bank (IOB) has reduced its overnight marginal cost of funds-based lending rate (MCLR) by 5 basis points to 7.95%, effective January 15, 2026. The decision was taken by the

bank’s Asset Liability Management Committee (ALCO) during a meeting on January 13, 2026, following a review of MCLR calculations as of January 10. All other MCLR tenors remain unchanged.

The one-month MCLR stands at 8.30%, three-month at 8.40%, six-month at 8.65%, and the one-year MCLR at 8.80%. The two-year MCLR is also unchanged at 8.80%, while the three-year MCLR continues at 8.85%.

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The revised rates will remain in force until further review, the bank said in a regulatory filing.

For borrowers, this means most loans linked to the MCLR won’t see a change in interest costs, while new borrowers can expect rates between 8.30% and 8.85% depending on loan tenure.

Last month, the government launched an Offer For Sale (OFS) to pare some stake in the lender with plans to sell up to 2% of IOB's outstanding equity through the OFS, with a greenshoe option of an additional 1%.

Shares of the company ended at ₹35.48 on Tuesday, which is 0.54% higher than the day's opening on the NSE.