UCO Bank Revises Benchmark Lending Rates Across Key Tenors Effective July 10, 2026

State-owned lender UCO Bank has announced a comprehensive restructuring of its benchmark interest rates following a periodic review by its Asset Liability Management Committee (ALCO). The revision includes marginal hikes in most Marginal Cost of Funds Based Lending Rate (MCLR) tenors alongside strategic realignments of its treasury-linked rates.

The new rate structures are scheduled to take effect from July 10, 2026.

Upward Adjustments to Key MCLR Tenors

The bank has decided to increase its lending rates by 5 basis points across nearly all key tenors, which will directly impact the pricing of floating-rate loans, such as corporate credit and older retail accounts tied to the MCLR regime:

Overnight Rate: Remains perfectly flat, held steady at 7.90%.

One-Month Tenor: Adjusts upward from the existing rate of 8.15% to a new level of 8.20%.

Three-Month Tenor: Moves up to 8.45% against the previous rate of 8.40%.

Six-Month Tenor: Climbs to 8.70% from its prior benchmark of 8.65%.

One-Year Tenor: Which acts as the anchor rate for the majority of retail credit packages, transitions from 8.75% up to 8.80%.

Re-alignment of Treasury and G-Sec Linked Benchmarks

In contrast to the rising cost of funds seen in the MCLR updates, UCO Bank's primary treasury-linked benchmarks experienced downward shifts, tracking broader sovereign bond market movements:

Treasury Bill Linked Rates (TBLR): The three-month TBLR dropped from 5.40% to 5.30%, while the six-month TBLR decreased from 5.60% to 5.50%. Conversely, the long-term twelve-month TBLR edged slightly higher, moving from 5.75% up to 5.80%.

UCO G-Sec Rate: The bank's proprietary one-year Government Security linked rate saw a sharp reduction, falling from an even 6.00% down to 5.57%.

10-Year G-Sec Benchmarks: The bank declared the annualized Yield to Maturity (YTM) for the baseline 10-year G-Sec at 7.11%, paired with a par yield calculation of 6.85%.

Retail Loan Benchmarks Stand Firm

Borrowers tied to newer retail loan products will see their rates remain unchanged. UCO Bank confirmed that its primary consumption lending benchmarks-specifically the Repo Linked Rates-remain entirely unaffected by this revision cycle. The UCO Float Repo Linked Rate stays flat at 8.05%, and the UCO Prime Repo Linked Rate holds steady at 5.25%.

Furthermore, historical lending benchmarks remain completely untouched, with the bank's legacy Base Rate remaining at 9.60% and its Benchmark Prime Lending Rate (BPLR) holding constant at 14.25%.

Shares of UCO Bank was last trading in BSE at Rs. 26.76 as compared to the previous close of Rs. 26.04. The total number of shares traded during the day was 481778 in over 1285 trades.

The stock hit an intraday high of Rs. 27.01 and intraday low of 26.17. The net turnover during the day was Rs. 12809368.00.

Source : Equity Bulls

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