HDFC Bank increases MCLR by 5 bps for two tenures. Check current rates

HDFC Bank has announced an increase in its marginal cost of funds-based lending rates (MCLR) by up to 5 basis points (bps) for select tenures, effective immediately. This adjustment now sets the bank's MCLR interest rates in a range of 9.10% to 9.50%, potentially impacting borrowing costs for customers.

The changes specifically impact the six-month and three-year tenures, with the six-month MCLR rising from 9.40% to 9.45%. The one-year MCLR, a significant benchmark for many consumer loans, remains unchanged at 9.45%. Additionally, the three-year MCLR has been raised from 9.45% to 9.50%. Other revised rates include 9.10% for overnight loans, 9.15% for one-month loans, and 9.30% for three-month loans.

The Marginal Cost of Funds-based Lending Rate (MCLR) is a reference interest rate utilised by banks in India for setting the interest rates on loans. It serves as the floor rate at which a bank can offer a loan. Introduced by the Reserve Bank of India (RBI) on April 1, 2016, MCLR replaced the previous base rate system. 

The calculation of MCLR takes into account various factors including operating expenses, tenor premiums, deposit rates, repo rates, and the cost of maintaining cash reserve ratio. The Marginal Cost of Funds Based Lending Rate (MCLR) fluctuates according to the duration of the loan. The Reserve Bank of India (RBI) has advised banks to permit borrowers with base rate loans to transition to MCLR in case of policy rate adjustments. Nevertheless, it is advisable to seek expert advice before finalizing any decisions.

HDFC Bank: Current lending rates

When it comes to home loans, HDFC Bank provides rates that are linked to the prevailing policy repo rate of 6.50%. Special home loan rates are available for both salaried and self-employed individuals, ranging from 8.75% to 9.65%. Standard home loan rates, on the other hand, fall in the range of 9.40% to 9.95%.

Lending Rate    Revised Rate (%)
Overnight    9.10
One Month    9.15
Three Months    9.30
Six Months    9.45
One Year    9.45
Two Years    9.45
Three Years    9.50

The rise in MCLR may impact consumer behavior, especially for individuals with loans linked to the one-year MCLR. Analysts are closely monitoring the potential impact of these adjustments on loan demand and the overall economic activity.