HDFC Bank has increased its marginal-cost based lending rate (MCLR) by 25 bps across all tenors. The hike across all tenors has become effective from May 7. The lender is among a list of banks to recently increase their lending rates. The Reserve Bank of India also decided to increase its repo rate by 40 bps to 4.40 per cent.
The increase in MCLR means that the cost of house, personal, car loans will increase.
With the latest increase, its overnight MCLR stands at 7.15 per cent, while the rate for one-month, three-month and six-month tenors increasing to 7.20 per cent, 7,30 per cent and 7.35 per cent., respectively.
HDFC Bank’s one-year MCLR has increased to 7.50 per cent, while two- and three-year tenors have increased to 7.60 per cent and 7.70 per cent.
This increase comes after State Bank of India, Kotak Mahindra Bank, Bank of Baroda and Axis Bank increased their MCLR rates. Public lender State Bank of India (SBI) has hiked the MCLR across tenors by 10 basis points (bps). Kotak Mahindra Bank also increased MCLR across all tenors. BOB and Axis bank increased their MCLR by 5 basis points.
Additionally, India's central bank hiked its key lending rate or the repo rate on Wednesday by 40 bps to 4.40 per cent. It also hiked CRR or cash reserve ratio by 50 basis points to 4.5 per cent from May 21. Repo rates refer to the rate at which commercial banks borrow money from the central bank – in India’s case, the RBI – to maintain liquidity. It is one of the most important means to control inflation.
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