Loans to get cheaper as HDFC Bank cuts MCLR by 10 basis points

Private sector lender HDFC Bank on Friday slashed its Marginal Cost Based Lending Rate (MCLR) for all tenors by 10 basis points (bps). One basis point is equal to one-hundredth of one per cent.

Following the reduction in rate, the bank's overnight MCLR stands at 7 per cent while the one-month MCLR is 7.05 per cent. The three-month and six-month MCLRs is now 7.10 per cent and 7.20 per cent, respectively. Two-year MCLR now stands at 7.45 per cent, while three-year MCLR is at 7.55 per cent.

The rate cut will be effective from Friday, i.e., August 7, 2020, as per the bank's website. This will make EMIs (Equated Monthly Instalments) on home and other loans connected to marginal cost of funds-based lending rate cheaper. Banks usually assess their MCLR every month.

Also Read: HDFC Bank delayed submissions of loan data, credit bureau informs RBI

The rate cut by HDFC Bank comes just a day after the RBI announced its decision to keep the repo rate unchanged at 4 per cent following its bi-monthly monetary policy meet of FY21.

Below are HDFC Bank's tenor-wise MCLRs effective from August 7, 2020:-

Overnight - 7.00

1 month - 7.05

3 month - 7.10

6 month - 7.20

1 year - 7.35

2 year - 7.45

3 year - 7.55

Meanwhile, state-run Canara Bank too has slashed its MCLR by up to 30 basis points across various tenors effective from August 7, 2020. ICICI Bank has also cut its lending rates by 10 bps across all tenors effective August 1, 2020.

Also Read: HDFC cuts lending rates by 20 basis points; check out MCLR across tenors