Loan rates from HDFC Bank: on a few select tenors, HDFC Bank raised its Marginal Cost Based Lending Rate (MCLR) by 5 to 15 basis points. On May 8, 2023, the new loan interest rates will go into effect, according to the HDFC Bank website.
The minimum lending rate below which a bank is not allowed to lend is known as the MCLR.
Those who have floating-rate personal loans and auto loans, which fluctuate with the change in the MCLR, will be impacted by HDFC Bank’s most recent increase in MCLR rates.
Following the most recent increase, the HDFC Bank’s overnight MCLR will be 7.75%, while the MCLR for one month will be 8.10%. The MCLRs for the three and six months are, respectively, 8.40 and 8.80%.
The one-year, two-year, and three-year MCLRs of the HDFC Bank are 9.05%, 9.10%. and 9.20% respectively. These rates apply to all consumer loans. One-tenth of a percentage point is referred to as a basis point.
| Tenor | MCLR |
| Overnight | 7.95% |
| 1 Month | 8.10% |
| 3 Month | 8.40% |
| 6 Month | 8.80% |
| 1 Year | 9.05% |
| 2 Year | 9.10% |
| 3 Year | 9.20% |
Effective Date: May 8, 2023.
Even though the Reserve Bank of India (RBI) decided to keep the repo rate unchanged at its most recent policy meeting in April, HDFC Bank is the newest bank to modify its MLCR. The MCLR was then modified by Canara Bank and Bank of Baroda (BOB).
Beginning of April 12, the Bank of Baroda increased its MLCR by 5 basis points for a select group of tenors, while Canara Bank increased its six-month and one-year MCLRs by 5 basis points to 8.45% and 8.65%, respectively.
However, the State Bank of India has not revised its MCLR since the last repo revision by the RBI. Commercial banks are expected to increase the MCLR by 100-150 basis points in FY24, as per a study by India Ratings and Research. RBI data showed that banks raised the median MCLR by 120 basis points between Mat 2022 and February 2023 in response to the repo rate hike. MCLR-linked loans are mostly given to corporate and business establishments, and according to RBI data, these loans accounted for 46.5% of the outstanding floating rate rupees loans as of September 2022. Ind-Ra predicts that MCLR will see a significant rise in FY24 due to the drawdown by banks from the reverse reop in FY23, which addressed the surge in the gap between incremental credit and deposit.