According to the HDFC Bank website, the overnight MCLR would increase by 15 basis points to 8.10% as of June 7, 2023, from the previous 7.95%.
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HDFC Bank Latest Update: In a big news for home buyers, India’s largest private lender HDFC Bank on Wednesday said it has hiked the marginal cost of funds-based lending rates (MCLR) by 5 basis points to 15 basic points. In a statement, the bank said the increased MCLR rate will come into effect from Wednesda.
According to the updates from the HDFC Bank website, the overnight MCLR would increase by 15 basis points to 8.10% as of June 7, 2023, from the previous 7.95%.
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Check New MCLR Rates Here
Notably, other duration rates such as the 1-year MCLR, the 2-year MCLR, and the 3-year MCLR will remain unchanged. This MCLR rate hike by HDFC is the second in the two-month period, as earlier on May 8, the HDFC Bank increased MCLR rates from 5 to 15 basis points.
It should be noted that the lending rates have been changed for overnight to 6-month periods, and the rates for the rest of the duration categories remain unchanged. To be specific, the MCLR rate for a one-month period has been increased to 8.20 percentage points, and the new rate for a three-month MCLR is 8.50 percentage points.
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Will EMIs Go Up?
The MCLR is the minimum interest rate that banks are required to charge for a specific loan. It acts as a benchmark or lower limit on lending rates, thereby meaning that the banks can’t allow a loan below this rate. And this would mean that the rate at which the term loans are given to the public cannot be less than the MCLR, thereby impacting the EMIs.
However, it must also be noted that not all term loans are linked to MCLR, and therefore, not all EMIs might get affected.
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What Is MCLR?
The Reserve Bank of India (RBI) established the MCLR, a transparent approach for establishing lending rates, to replace the base rate structure in April 2016. It is determined by factors like the repo rate, the bank’s operating costs, and the tenure premium.
Personal, vehicle, and house loans are all subject to MCLR. On a general note, the EMI (equated monthly installments) on loans increases with a rise in the MCLR, while loans of all types decrease in price with a fall in the MCLR.
