Banking: Relief to loan takers, this government bank has reduced MCLR rates, EMI will decrease..

If you are a public sector bank, UCO Bank has announced to give relief to its customers. Actually, the bank will now give cheaper loans to its customers. The bank has reduced the interest rates on loans. The bank has reduced the Marginal Cost Based Lending Rate (MCLR) by 5 basis points, i.e., 0.05 percent, for all tenures.

The bank said that this change came into effect on September 10. Now the one-year MCLR has been reduced from 8.95 percent to 8.90 percent. Along with this, a reduction of 0.05 percent has also been made on loans with tenures of one day, one month, 3 months, and 6 months. However, the bank has clarified that no changes have been made in the rates linked to the repo rate, base rate, and benchmark prime lending rate (BPLR).

What is MCLR

Let us tell you that MCLR is the standard rate at which most home loans, personal loans, and corporate loans are fixed; that is, now new borrowers and existing customers coming in the reset period will get some relief. Recently, RBI kept the repo rate stable at 5.5 percent in the monetary policy of August 2025, but many banks have reduced their MCLR to attract customers and maintain competition.

Increased return on 10-year bonds

Along with this, the bank has increased the yield on 10-year government securities from 6.51 percent to 6.78 percent; that is, investors will now get higher returns on these bonds. This step will give cheaper loans to the customers on the one hand, while making government bonds more attractive for investors.

These government banks made loans cheaper.

Recently, Punjab National Bank (PNB) and Bank of India (BoI) have reduced the interest on loans. Both banks have reduced the MCLR from September 1, 2025. Bank of Baroda informed on Wednesday (September 10) that it has reduced the overnight MCLR, i.e., Marginal Cost of Fund Based Landing Rate, by 10 basis points. Now this rate will be 7.85 percent and this change will be effective from September 12.

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