Indian Overseas Bank has announced a selective reduction in its Marginal Cost of Funds based Lending Rate (MCLR) effective from April 15, 2026. The decision was taken by the bank's Asset Liability Management Committee (ALCO) during its meeting held on April 13, 2026, following a comprehensive review of MCLR workings as on April 10, 2026.

Rate Reduction Details

The bank has decided to reduce three specific MCLR tenors by 5 basis points each. The overnight MCLR will be lowered from 7.95% to 7.90%, while both the 1-year and 2-year MCLR rates will be reduced from 8.80% to 8.75%. This marks a strategic move to adjust lending rates in response to current market conditions.

Complete MCLR Structure

The revised MCLR rates across all tenors are detailed below:

Unchanged Rates

While three tenors witnessed reductions, the bank has maintained stability in other MCLR rates. The one-month MCLR remains at 8.20%, three-month at 8.40%, six-month at 8.65%, and three-year at 8.85%. This selective approach indicates the bank's measured response to market dynamics while maintaining profitability across different lending segments.

Implementation Timeline

The revised MCLR rates will become effective from April 15, 2026, and will remain in force until the next review by the Asset Liability Management Committee. The bank has communicated this change to stock exchanges as part of its regulatory compliance under Regulation 30 of SEBI (LODR) Regulations, 2015. Borrowers with loans linked to the affected MCLR tenors will benefit from the reduced rates, potentially leading to lower EMIs for existing customers and more competitive rates for new borrowers.

Indian Overseas Bank has submitted its half-yearly statement of debt securities for the period ended March 31, 2026, to both BSE and NSE. The submission was made on April 7, 2026, in compliance with SEBI Master Circular no. SEBI/HO/DDHS/PoD1/P/CIR/2024/54 dated May 22, 2024, which mandates the filing of half-yearly debt securities statements.

Outstanding Debt Securities Portfolio

The bank's debt securities portfolio comprises four active issuances with a combined outstanding amount of ₹3,165.00 crore. The securities demonstrate a diversified maturity profile spanning from 2029 to 2036.

*Call option available at the end of 5 years (with prior approval of RBI)

Key Features and Terms

All four debt securities carry annual interest payment frequency and maintain their full issued amounts as outstanding, indicating no partial redemptions have occurred. The coupon rates vary significantly across the portfolio, with the highest rate at 9.08% on the 2019 issuance maturing in 2029 and the lowest rate at 7.80% on the most recent 2026 issuance. The largest issuances are ₹1,000.00 crore each for the 2023 and 2026 securities.

Embedded Options and Flexibility

Three of the four securities feature call options that become exercisable at the end of the fifth year from issuance, subject to prior RBI approval. This structure provides the bank with refinancing flexibility while offering investors protection through the initial five-year period. The 2019 issuance does not carry any embedded options.

Regulatory Compliance

The statement was signed by Raghuram Mallela, Deputy General Manager/Company Secretary & Compliance Officer, ensuring proper corporate governance and regulatory adherence. The bank maintains relationships with two debenture trustees - IDBI Trusteeship Services Ltd managing three issuances and SBICAP Trustee Company Limited handling the 2023 issuance.