HDFC Bank slashes MCLR by up to 85 bps on these tenures; check here

HDFC Bank, one of India's leading banks, has recently announced a reduction in its Marginal Cost Based Lending Rate (MCLR) for specific tenures by up to 85 basis points. The revised lending rates came into effect on April 10, 2023, as mentioned on the bank's website.

The overnight MCLR has been reduced by 85 basis points, now standing at 7.80 per cent compared to the previous rate of 8.65 per cent.

Additionally, the one-month MCLR has been lowered by a substantial 70 basis points, from 8.65 per cent to 7.95 per cent, as indicated on the HDFC Bank website. These rate reductions were effective from April 10, 2023.

The three-month MCLR has been reduced by 40 basis points and now stands at 8.30 per cent, compared to the earlier rate of 8.70 per cent.

Similarly, the six-month MCLR has been lowered by 10 basis points to 8.70 per cent, compared to the previous rate of 8.80 per cent.

The decision may have been influenced by the Reserve Bank of India (RBI), which maintained the repo rate at 6.5 per cent during its bi-monthly monetary policy meeting held on April 6, 2023.

As per RBI guidelines, all floating rate loans sanctioned after April 1, 2016, are linked to the MCLR.

Recently, the Bank of Baroda (BoB) has hiked its benchmark lending rates by 5 basis points on various tenures. The new rates will come into effect from April 12th. With the latest hike, EMIs on term loans linked to the respective benchmark rates will likely go up as well.

With effect from April 12, the bank will raise the Marginal Cost of Funds Based Lending Rate (MCLR) by 5 bps on overnight tenure to 7.95%. Currently, the rate is 7.9%.

The Marginal Cost Based Lending Rate (MCLR) is the minimum interest rate that a financial institution, such as HDFC Bank, can charge for a particular loan. It serves as the lower limit for the interest rate on a loan unless otherwise specified by the RBI.