Lending Rates: HDFC Bank has increased the Margin Cost of Funds Based Lending Rates (MCLR) by 0.05 percent. This increase has been made for loans of selected loan tenure.
MCLR: HDFC Bank, the largest private sector bank, has shocked its customers before Diwali. HDFC Bank has increased the Margin Cost of Funds Based Lending Rates (MCLR) by 0.05 percent.
This increase has been made for loans of selected loan tenure. Due to increase in MCLR, auto loan, home loan and personal loan will become expensive and EMI will increase. The new rates have come into effect from 7 November 2023.
The Reserve Bank of India (RBI) has been maintaining the repo rate in the monetary policy review for the last five times. Despite that the bank has increased the interest rate. After the merger of HDFC Limited with itself, the net interest margin of the bank has reduced.
New interest rates
Under the revised interest rate, one day MCLR has increased from the current 8.60% to 8.65%. Whereas MCLR related to 3 years has increased from 9.25% to 9.30%. However, MCLR for one year tenure has been retained at 9.20%.
What is MCLR?
MCLR is actually the minimum interest rate below which no bank can give loans to customers. It is mandatory for banks to declare their overnight, one month, three month, six month, one year and two year MCLR every month. Increase in MCLR means that interest rates on loans related to marginal cost like home loan, vehicle loan will increase.
