Banking: Banks take a big step, now these people's home loan EMI may be reduced..

In October 2025, several major banks in the country provided significant relief to their customers. Bank of Baroda (BoB), Indian Bank, and IDBI Bank reduced their Marginal Cost of Funds-Based Lending Rate (MCLR). This will directly benefit those who have taken home loans or other loans at floating rates.

This reduction in interest rates follows the October meeting of the Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC). In this meeting, the RBI kept its key repo rate stable at 5.50%, but banks revised the MCLR to provide relief to retail customers.

What is MCLR, and what impact does it have?
MCLR, or Marginal Cost of Funds Based Lending Rate, is the rate at which banks lend to their customers. When MCLR is reduced, it can reduce the EMI of floating-rate loans or shorten the loan term. Although new floating rate loans are typically linked to the EBLR (External Benchmark Linked Lending Rate), existing loan customers linked to the MCLR will directly benefit from this reduction.

Bank of Baroda's New MCLR Rates
Bank of Baroda has revised its MCLR rates effective October 12, 2025. The one-month MCLR has been reduced from 7.95% to 7.90%. The six-month MCLR has been reduced from 8.65% to 8.60%, and the one-year rate has been reduced from 8.80% to 8.75%. However, overnight and three-month rates remain unchanged.

IDBI Bank also reduced rates
IDBI Bank has also reduced some of its MCLR rates. The overnight MCLR has been reduced from 8.05% to 8%, and the one-month MCLR has been reduced from 8.20% to 8.15%. However, the three-month, six-month, and one-year rates remain unchanged. The one-year MCLR remains at 8.75%. These revised rates are effective from October 12, 2025.

Indian Bank also provided relief.
Indian Bank also provided relief to its customers. The bank has reduced the overnight MCLR from 8.05% to 7.95%, while the one-month MCLR has been reduced from 8.30% to 8.25%. The three-month, six-month, and one-year rates remain unchanged at 8.45%, 8.70%, and 8.85%, respectively. These new rates are effective from October 3, 2025.

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