PNB hikes MCLR by 10 bps across all tenures; Bank of India cuts rates by 10 bps

Punjab National Bank (PNB) has increased its Marginal Cost of Funds-based Lending Rates (MCLR) by 10 basis points (bps) across all six tenures, effective November 1, 2026.

Following the revision, PNB's overnight MCLR has increased from 8.00% to 8.10%, while the one-month rate has risen from 8.25% to 8.35%. The three-month MCLR has been revised upwards from 8.50% to 8.60%, the six-month rate from 8.65% to 8.75%, and the one-year rate from 8.80% to 8.90%. The three-year MCLR has also increased from 9.10% to 9.20%.

In contrast, Bank of India has reduced its MCLR by 10 bps across four tenures, also effective November 1, 2026. The bank has lowered its three-month MCLR from 8.45% to 8.35%, six-month rate from 8.75% to 8.65%, one-year rate from 8.90% to 8.80%, and three-year rate from 9.00% to 8.90%. Its overnight and one-month MCLR rates remain unchanged at 7.85% and 8.15%, respectively.

Impact on home loans and EMIs

The increase in MCLR could translate into higher borrowing costs for customers with MCLR-linked home loans, depending on their loan reset dates. Similarly, borrowers whose loans are linked to reduced MCLR may benefit from lower interest costs when their rates are reset.

For a borrower with a floating-rate home loan, the actual EMI impact will depend on the loan's benchmark, outstanding principal, remaining tenure and applicable reset date. Repo-linked home loans are not automatically affected by changes in MCLR.

The contrasting revisions highlight different lending-rate strategies among public sector banks.

Meanwhile, the Reserve Bank of India (RBI), in its October 7 monetary policy review, raised the policy repo rate by 25 bps to 5.50% and shifted its stance to calibrated tightening. The next MPC meeting is scheduled for December 2-4, 2026; its policy decision is yet to be announced.

Following the repo rate hike, State Bank of India (SBI) raised its MCLR by 15 bps across five tenures, effective October 15. The bank also increased its external benchmark-linked rate (EBLR) and repo-linked lending rate (RLLR).

Meanwhile, Bank of Baroda's MCLR schedule, effective October 12, 2026, reflected no change in rates. Its overnight MCLR stood at 7.85%, one-month at 7.95%, three-month at 8.30%, six-month at 8.50%, and one-year at 8.75%.