HDFC Bank raises MCLR on overnight tenure by 5 basis points to 9.20%

Don't want to miss the best from Business Standard?

The country’s largest private sector lender HDFC Bank has increased its marginal cost of funds based lending rate (MCLR) on the overnight tenure by 5 bps, with new effective rate being 9.20 per cent versus 9.15 per cent earlier. 

 

With this revision, the bank’s MCLR now ranges from 9.20 to 9.45 per cent.

 

This comes even as the six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) cut the policy repo rate by 25 bps. This was the first cut in the repo rate in as many as five years.

 

With a cut in the policy repo rate, external benchmark-linked loans get repriced immediately to reflect the cut, but MCLR-linked loans take up to two quarters to reflect the change in policy rates.

 

About 40 per cent of the banking system’s loans are linked to the external benchmark, and a similar percentage of loans are linked to the MCLR.

 

While most retail loans are linked to an external benchmark, corporate loans are linked to the MCLR.