HDFC Bank, the country’s largest private bank, increased its marginal cost-based lending rate (MCLR) on loans of all maturities by 25 basis points (bps). Raising HDFC Bank’s lending rate will make EMIs more expensive for home equity and other loans that are tied to the lending rate based on the marginal cost of refinancing.
According to HDFC Bank’s website, the overnight MCLR is 7.15% after the latest rate cut, while the one-month MCLR is 7.20%. Three-month and six-month MCLR are 7.25% and 7.35%, respectively. The one-year MCLR, to which much of the consumer credit is tied, is now 7.50%, the two-year MCLR is now 7.60%, while the three-year MCLR has been fixed at 7.70%. These new rates will apply from May 7th as stated on HDFC Bank’s website.
This makes home, car, personal and other loans more expensive. The Equal Monthly Rate (EMI) for different loan categories will increase.
HDFC Bank tenor MCLRs effective May 7, 2022
This comes after the State Bank of India (SBI), Bank of Baroda, Axis Bank and Kotak Mahindra Bank also announced increases in their MCLR rates.
Banks have raised lending rates for the first time in about three years.
In a surprise move on May 4, after an unscheduled MPC meeting, the Reserve Bank of India (RBI) hiked interest rates by 40 basis points (bps) to 4.40 percent in a bid to stem inflation that has been stubbornly above the 6 percent target lies cents for the last three months.