HDFC Bank hikes MCLR rates by up to 15 bps on overnight to six months tenure; EMIs to go up

Leading private sector lender, HDFC Bank has hiked benchmark marginal cost of funds-based lending rates (MCLR) by 5 basis points to 15 basis points with effect from Wednesday onward. The lending rates have been raised from tenures starting overnight to six months. While other interest rates remained unchanged.

As per HDFC Bank's website, from June 7, 2023, overnight MCLR will be at 8.10% --- up by 15 bps from earlier 7.95%.

Meanwhile, one-month MCLR has been increased by 10% to 8.20% from the previous 8.20%. Also, the three-month MCLR is at 8.50%, up by 10 bps from the earlier 8.40%.

However, the six-month MCLR saw a much lower hike of 5 bps to 8.85% from the previous 8.80%.

On the contrary, MCLRs above 1-year tenures are unchanged.

Read here: Samco Active Momentum Fund NFO begins on June 15; check investment strategy, offer details

At HDFC Bank, 1-year MCLR is at 9.05%, while 2-year and 3-year MCLR is at 9.10% and 9.20%.

Earlier, on May 8, HDFC Bank made a similar hike of 5 bps to 15 bps on MCLR rates.

In general terms, MCLR is the minimum interest rate that banks require to charge for a specific loan. MCLR works as a benchmark or lower limit of lending rates. This means that banks cannot go lower than MCLR rates in offering their term loans like personal loans, car loans, home loans, and education loans among others.

Read here: Q4 tepid for speciality chemical firms as cocktail of factors play spoilsport

However, it needs to be noted that, since external benchmark lending rates and repo-rate-linked lending rates have come into the picture, not all term loans are linked to MCLR. And hence, the hike in MCLR may not be faced in every loan category or by every borrower at HDFC Bank.

On BSE, at the time of writing, HDFC Bank traded at ₹1602.95 apiece marginally up from the previous closing. The stock traded in the range of ₹1606.55 to ₹1596.60.

By the end of the March 2023 quarter, the lender's total advances stood at ₹1,600,586 crore, an increase of 16.9% YoY. In terms of segment-wise, domestic retail loans grew by 20.8%, commercial and rural banking loans grew by 29.8%, and corporate and other wholesale loans grew by 12.6%. Overseas advances constituted 2.6% of total advances.