HDFC Bank, the country’s largest private sector bank, raised its marginal cost-based lending rate (MCLR) on loans for all maturities by 25 basis points (bps). HDFC Bank’s lending rate hike will make higher EMIs on home and other loans related to its marginal cost of funds-based lending rate.
According to HDFC Bank’s website, after the last rate cut, its overnight MCLR stands at 7.15%, while the one-month MCLR is 7.20%. The three-month and six-month MCLR are 7.25% and 7.35% respectively. The one-year MCLR, which many consumer loans are tied to, will now be 7.50%, the two-year MCLR will now be 7.60%, while the three-year MCLR has been set at 7, 70%. These new rates come into effect on May 7, according to the HDFC Bank website.
This will make home, car, personal and other loans more expensive. The equivalent monthly payment (EMI) for different categories of loans will increase.
HDFC Bank’s MCLRs per tenor come into effect on May 7, 2022
6 months -7.35%
It comes after State Bank of India (SBI), Bank of Baroda, Axis Bank and Kotak Mahindra Bank also announced an increase in their MCLR rates.
Banks raised their lending rates for the first time in about three years.
In a surprise decision on May 4, the Reserve Bank of India (RBI) after an unscheduled meeting of the MPC raised the benchmark lending rate by 40 basis points (bps) to 4.40% to contain inflation which is remained stubbornly above the 6% cent target for the past three months.