Rate hike: HDFC Bank raises MCLR by 25 basis points across all tenures

HDFC Bank on Monday hiked its marginal cost of funds-based lending rate (MCLR) by 25 basis points across all tenures, effective May 7.

This comes after the monetary policy committee raised the benchmark repo rate by 40 basis points to 4.40 per cent in an off-cycle meeting to tame rising inflation.

According to the private lender’s website, the overnight MCLR stands at 7.15 per cent compared to 6.9 per cent earlier. Similarly, its one year MCLR and 2 year MCLR now stand at 7.50 per cent and 7.60 per cent, respectively. The three year MCLR stands at 7.70 per cent.

As of December 2021, a little over 39 per cent of loans by banks are linked to the external benchmark, shows Reserve Bank of India (RBI) data. And, 53 per cent of loans of the banking system are linked to the MCLR.

Consequent to the repo rate hike, a number of lenders have hiked their external benchmark linked rates. Last week, ICICI Bank raised its external benchmark lending rate by 40 basis points to 8.10 per cent while Bank of Baroda has raised its repo linked lending rate to 6.90 per cent. RBL Bank’s repo linked lending rate stands at 9.50 per cent, effective May 4, 2022.

Mortgage lender HDFC Ltd also raised interest rate on home loans by 30 basis points, effective May 9. The new rates will start from 7 per cent as against 6.7 per cent earlier.

A bunch of lenders, including Bandhan Bank, Kotak Mahindra Bank, Jana Small Finance Bank, Bank of Baroda, ICICI Bank, and Punjab National Bank also announced deposit rate hikes across multiple tenor baskets for retail customers.