Indian Overseas Bank (IOB) has announced a **5-basis point reduction** in its overnight Marginal Cost of Funds-based Lending Rate (MCLR), effective January 15. While this adjustment signals a shift in the lender's pricing strategy, the immediate impact on the broader loan portfolio is expected to be limited, as the cut is restricted to the overnight tenor. Investor sentiment remains centered on the **government’s ongoing Offer For Sale (OFS)**. Market participants are balancing the marginal rate adjustment against the broader implications of the equity dilution and the bank's long-term interest margin outlook. The lender continues to face scrutiny regarding its cost of funds and asset-liability management. Despite the specific rate cut, existing borrowers on longer-term benchmarks will see no immediate change in their repayment obligations, keeping the primary focus on the bank's capital-raising activities and institutional demand.