Following the Reserve Bank India’s decision to hike repo rate by 25 bps to 6.5 per cent, leading banks, both public and private, have raised the marginal cost of funds-based lending rates, or MCLR, which will lead to the rise in home loan EMIs.
HDFC Bank has increased the MCLR by up to 10 basis points across tenors. According to HDFC Bank’s official website, the revised MCLR has already come in effect from February 7, 2023. The rise in MCLR directly impacts and increases the Equated Monthly Installments (EMIs) for consumer loans, like car loans and home loans.
HDFC has now raised the marginal cost of funds-based lending rates (MCLR) for overnight lending from 8.50 per cent to 8.60 per cent.
Similarly, for one-month loan, the MCLR has been raised to 8.60 per cent from 8.55 per cent previously.
For a three-month-long lending tenure, HDFC Bank’s marginal cost of funds-based lending rates has also increased by 5 basis points (bps) and is now available at 8.65 per cent, which was 8.60 earlier.
The MCLR for a six-month tenor is 8.75 per cent up from 8.70 per cent, an increase of 5 bps. The one-year MCLR will now be 8.90 per cent up from 8.85 per cent, the two-year MCLR will be 9.00 per cent from earlier 8.95 per cent, and the three years will be 9.10 per cent up from 9.05 per cent.
In a regulatory filing, Punjab National Bank said it increased the Repo Linked Lending Rate (RLLR) by 25 basis points from 8.75 per cent to 9 per cent. The rates are effective from Thursday.
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Bank of Baroda increased its Marginal Cost of Funds Based Lending Rate (MCLR) by 5 basis points across all tenures.
After the latest revision, its MCLR has risen from 7.85 per cent to 7.90 per cent for the overnight tenure. The MCLR for one month has been raised from 8.15 per cent to 8.20 per cent.
The MCLR for three-month tenure has climbed from 8.25 per cent to 8.30 per cent, while that for the one-year tenure has been hiked from 8.5 per cent to 8.55 per cent, it said.
RBI’s repo rate hike
On Wednesday, RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) raised the repo rate by 25 basis points to 6.5 per cent highlighting sticky core inflation. Repo Rate (RR) is the rate at which the central bank lends money to commercial banks or financial institutions, public or private, in India against government securities.
It is the sixth time the interest rate has been hiked by the Reserve Bank of India (RBI) since May last year, taking the total quantum of increase to 250 basis points.
