HDFC Bank has hiked its Marginal Cost of Funds Based Lending Rate (MCLR) across all tenors for borrowers 10 basis points (bps) with effect from today, 7 September 2022. One basis point is one-hundredth of a percentage point.
A hike in the MCLR rate implies an increase in loan interests for new and existing borrowers, including equated monthly instalments (EMIs) for home loans, vehicle loans and any other loan related to marginal cost.
Under the revised rates, effective today, HDFC Bank’s one-year MCLR has increased to 8.2 per cent, while the overnight MCLR rose to 7.9 per cent, as per information posted on the bank’s website. The one-year MCLR is considered important from a retail loans perspective, as a bank’s long-term loans like home loans are linked to this rate.
For the one-month, three-month and six-month tenor, the MCLR will be 7.90%, 7.95% and 8.05% respectively.
Last month, HDFC Bank had raised the marginal cost of fund based lending rates by 5-10 basis points across various tenors.
MCLR came in April 2016 wherein the banks were given a formula to calculate their cost of funding and then conduct monthly reviews of their offerings across various tenors. Each bank calculates its MCLR by taking into account factors such as its incremental cost of raising funds (say, via deposits) and operating expenses, among others.
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