Bank of India Hikes Select MCLR Rates; PNB Retains Lending Rates Unchanged from June 1

New Delhi, May 30, 2026: Two major public sector lenders, Bank of India and Punjab National Bank (PNB), have announced their latest lending rate reviews effective June 1, 2026. While Bank of India has increased select Marginal Cost of Funds Based Lending Rates (MCLR), Punjab National Bank has decided to keep all key benchmark lending rates unchanged.

The announcements were made through regulatory filings submitted to the stock exchanges under SEBI Listing Regulations.

Bank of India Revises MCLR Upward

Bank of India informed the exchanges that it has revised its Marginal Cost of Funds Based Lending Rate (MCLR) and Fixed Rate Spread (FRS) effective June 1, 2026. However, the bank's Repo Based Lending Rate (RBLR) remains unchanged.

Revised Bank of India MCLR Rates

The revision reflects a marginal increase of 5 to 10 basis points across short- and medium-term tenors, while the one-year and three-year MCLR rates remain unchanged.

Fixed Rate Spread Revised

Bank of India has also modified its Fixed Rate Spread (FRS) structure effective June 1, 2026:

• 1 Year: 8.75% + Credit Risk Premium (CRP)

• 2 Years: 9.25% + CRP

• 3 Years: 9.50% + CRP

• 5 Years: 9.85% + CRP

• Above 5 Years: 8.75% + Tenor Premium + CRP

The bank stated that its Repo Based Lending Rate (RBLR) remains unchanged.

Punjab National Bank Maintains Status Quo

Punjab National Bank has announced that its Marginal Cost of Funds Based Lending Rates (MCLR) will remain unchanged from June 1, 2026.

PNB MCLR Rates Effective June 1, 2026

The bank also confirmed that:

• Repo Linked Lending Rate (RLLR) remains unchanged at 8.10%, including BSP of 0.10%.

• Base Rate remains unchanged at 9.50%.

Impact on Borrowers

The slight increase in Bank of India's short-term MCLR rates may lead to a marginal rise in EMIs for borrowers whose loans are linked to MCLR benchmarks, particularly for corporate and legacy retail loans.

Meanwhile, PNB customers linked to MCLR, RLLR, or Base Rate benchmarks will not experience any immediate change in borrowing costs.

Banking Sector Outlook

The divergent approach adopted by the two public sector banks highlights varying funding cost dynamics within the banking sector. While Bank of India has adjusted rates to reflect funding cost considerations, Punjab National Bank has chosen to maintain stability in its lending benchmarks.

Market participants will closely monitor whether other major lenders follow Bank of India's moderate rate increase or retain current lending rates in the coming months.

Key Takeaways

• Bank of India raised Overnight, 1-Month, 3-Month and 6-Month MCLR rates effective June 1, 2026.

• One-Year and Three-Year MCLR rates at Bank of India remain unchanged.

• Punjab National Bank kept all MCLR rates unchanged.

• PNB's Repo Linked Lending Rate remains at 8.10%.

• PNB's Base Rate remains unchanged at 9.50%.

• Changes may affect borrowers whose loans are linked to MCLR benchmarks.