Karur Vysya Bank cuts MCLR by 25 bps across board

Karur Vysya Bank
| Photo Credit:
BIJOY GHOSH

Karur Vysya Bank has reduced its Marginal Cost of Funds Based Lending Rates (MCLR) by 25 basis points across all tenures, effective November 22, 2025. The decision follows a decline in deposit costs.

The revised rates now stand at 8.90% for overnight lending (down from 9.15%), while one-month and three-month MCLR rates have decreased to 9.05% from 9.30%. Six-month and one-year MCLR rates now stand at 9.20%, reduced from 9.45%.

This adjustment impacts multiple loan products including gold loans, property-backed loans, Kisan Credit Card advances, and corporate non-MSME loans.

The bank reported a reduction in deposit costs from 5.77% in Q1FY26 to 5.60% in Q2FY26.

Reserve Bank of India data indicates public sector banks maintain substantial MCLR-linked loan portfolios, while private banks predominantly use external benchmark lending rates.

In its recent monetary policy report, the central bank observed that MCLR and other legacy rate systems—using internal benchmarks with extended reset periods—continue to slow the transmission of policy rate adjustments.

Published on November 22, 2025