HDFC Cuts MCLR On Selected Tenures; EMIs To Go Down - Check Revised Loan Rates

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New Delhi: One of the top banks in India, HDFC Bank, recently announced a reduction in its Marginal Cost Based Lending Rate (MCLR) of up to 85 basis points for certain tenures. The bank's website states that the revised loan rates become effective on April 10, 2023. The overnight MCLR is now 7.8 percent instead of the prior rate of 8.65 percent after a reduction of 85 basis points.

According to the HDFC Bank website, the one-month MCLR has also been significantly reduced by 70 basis points, from 8.65 percent to 7.95 percent. The lower rates took effect on April 10, 2023. ()

The three-month MCLR is currently 8.30 percent, down from its previous rate of 8.70 percent, a 40 basis point reduction. The six-month MCLR has also been reduced by 10 basis points from its prior rate of 8.80 percent to 8.70 percent. ()

The Central Bank of India (RBI), which kept the repo rate at 6.5 percent during its bimonthly monetary policy meeting on April 6, 2023, may have had an impact on the decision.

Any floating rate loans approved after April 1, 2016, must be linked to the MCLR in accordance with RBI regulations. 

The Bank of Baroda (BoB) has increased its benchmark lending rates across all tenures by 5 basis points. From April 12th, the new pricing will be in effect. With the most recent increase, term loans linked to the relevant benchmark rates will probably see an increase in EMIs as well.

The bank will increase the overnight MCLR (Marginal Cost of Funds Based Lending Rate) by 5 basis points to 7.95% as of April 12. The current rate is 7.9%.

The lowest interest rate that a financial institution, like HDFC Bank, can charge for a certain loan is called the Marginal Cost Based Lending Rate (MCLR). Unless the RBI specifies differently, it acts as the lower limit for the interest rate on a loan.