HDFC Bank Raises Marginal Cost of Lending Rate Across All Tenors by 35 BPS

Strategic Insights -

HDFC Bank, India's largest private sector lender, has implemented a significant increase in its marginal cost of lending rate (MCLR) across all tenors. The bank has increased its MCLR by 35 basis points (bps), with the one-year MCLR, which is a key rate for consumer loans, now standing at 7.85%. This increase will result in higher interest rates on loans, including equated monthly installments (EMIs) for home loans, vehicle loans, and other loans related to marginal cost. The hike comes at a time when credit growth is sluggish, and banks are seeking to accelerate lending.

Key Takeaways:

  • HDFC Bank's MCLR has been increased by 35 bps across all tenors, with the one-year MCLR rising to 7.85%.
  • The overnight MCLR now stands at 7.50%, while the three-month and six-month MCLR are at 7.60% and 7.70% respectively.
  • The three-year MCLR will be 8.05%, up from 7.70% previously.
  • The rate hike will impact interest rates on loans and EMIs for new and existing borrowers, including home loans, vehicle loans, and other loans.
  • HDFC Bank had previously increased its MCLR by 25 bps on May 7, following a hike in the Reserve Bank of India's (RBI) repo rates by 40 bps.

Statistics:

  • MCLR increase across all tenors: 35 bps
  • One-year MCLR: 7.85%
  • Overnight MCLR: 7.50%
  • Three-month MCLR: 7.60%
  • Six-month MCLR: 7.70%
  • Three-year MCLR: 8.05%
  • HDFC Bank's MCLR hike prior to this: May 7, 2022 (25 bps increase)

Sources:

  • HDFC Bank website
  • Indian National Press (Bombay) Pvt. Ltd.