HDFC Bank raises MCLR rates by 35 bps across tenors; details here

Private lender HDFC Bank on Tuesday has hiked the marginal cost of lending rates (MCLR) by 35 basis points (bps) with effect from Tuesday. MCLR for overnight loans was hiked from 7.15 per cent to 7.50 per cent whereas for one-month loans, the lending rate went up from 7.20 per cent to 7.55 per cent. 

After the recent hike, MCLR for three-month loans, six-month loans and one-year loans went up to 7.60 per cent, 7.70 per cent and 7.85 per cent. Lending rate for two-year loans and three-year loans reached 7.95 per cent and 8.05 per cent, respectively.   

The bank defines MCLR as “minimum interest rate a financial institution needs to charge for a specific loan.”  The MCLR also dictates what the lower limit of the interest rate for a loan and is set in stone for borrowers unless specified otherwise by the Reserve Bank of India, as per the bank. HDFC Bank is not the only bank to hike MCLR rates from today. 

State-backed Canara Bank also announced revision of their MCLR rates. 
The state lender hiked MCLR for six-month and one-year loans to 7.35 per cent and 7.40 per cent respectively. It kept MCLR rates for overnight, one-month and three-month remained unchanged at 6.65 per cent and 6.95 per cent. This rate hike will come into effect from June 7.  

The hike in MCLR rates comes a day before the RBI MPC outcome announcement by governor Shaktikanta Das. Das already indicated that there may another hike in the repo rate while he did not comment on the quantum of the hike. There are reports that the RBI may go for minimum 35 basis points (bps) hike over and above 40 bps hike effected last month after an off-cycle MPC meeting.

Also read: Canara Bank hikes certain MCLR from tomorrow: Details here

Also read: RBI MPC: 3-day deliberations begin amid speculations of repo, CRR rate hikes