Since the Reserve Bank of India raised the repo rate, several banks have hiked interest rates. Following the trend, private lender, HDFC Bank has announced an increase in its Marginal Cost of Funds based Lending Rate (MCLR). The bank has increased its MLCR by 25 basis points (bps) across all loan tenors. Increased MCLR will lead to rising in the cost of vehicles, housing, personal, and various other loans. Bank borrowers will see a hike in equated monthly installments for varied loans.
With the latest hike in MCLR, its overnight MCLR stands at 7.15 per cent, while the rate for one-month, three-month, six-month, 1-year, 2-year, and 3-year tenors stands at 7.20 per cent, 7.25 per cent, 7.35 per cent, 7.50 per cent, 7.60 per cent, and 7.70 per cent, respectively.
The bank has stated on its official website, “The Marginal Cost of the Fund-Based Lending Rate (MLCR) is the minimum interest rate a financial institution needs to charge for a specific loan. It dictates the lower limit of the interest rate for a loan. This rate limit is set in the stone for borrowers unless specified otherwise by the Reserve Bank of India. ”
Since the RBI has hiked the lending rate to 4.40 percent, several banks including Bank of Baroda, State Bank of India, Kotal Mahindra Bank, and Axis Bank have increased their MCLR rates.
