Indian Overseas Bank raised its lending rates by 5 basis points across six tenors from October 15, 2026. The bank said these revised rates will remain in effect until further review. This change means many customers might see higher borrowing costs on their loans, depending on their specific loan reset dates.
Indian Overseas Bank has raised its Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points across six tenors, effective October 15, 2026. The one-month lending rate remains unchanged.
The overnight MCLR has increased to 7.95% from 7.90%, while the three-month rate has risen to 8.50% from 8.45%. The six-month MCLR has been raised to 8.75% from 8.70%.
The one-year and two-year MCLR rates have each increased to 8.90% from 8.85%. The three-year rate has risen to 8.95% from 8.90%.
The one-month MCLR remains at 8.25%. The revised rates will remain in effect until further review, the bank said.
MCLR is a benchmark used by banks to determine interest rates on certain loans. An increase can raise borrowing costs for customers whose loans are linked to the revised benchmark, depending on their loan terms and reset dates.
Indian Overseas Bank Q1 results
Indian Overseas Bank reported its June-quarter results on July 20, with the government-owned lender's shares rising 3.50% after the announcement.
The Chennai-based bank reported a 34% year-on-year increase in net interest income (NII), a measure of core lending income, to ₹3,688 crore from ₹2,747 crore.
Net profit rose 49% to ₹1,659 crore from ₹1,111 crore in the year-ago quarter.
The bank's asset quality also improved sequentially. Gross non-performing assets (NPAs), or loans where borrowers have fallen behind on repayments, declined to 1.33% from 1.42% in March. Net NPAs fell to 0.18% from 0.21%.
Provisions, or funds set aside to cover potential loan losses, stood at ₹834 crore, down from ₹1,006 crore in the previous quarter.
Indian Overseas Bank shares closed 1.05% lower at ₹30.26 apiece on October 12, falling ₹0.32.