Loans to become cheaper for HDFC Bank customers, MCLR cut by 20 bps across all tenors

The rate cut is effective from Tuesday (July 7), according to HDFC Bank website.

New Delhi: HDFC Bank has cut its marginal cost of funds-based lending rate (MCLR) by 20 basis points (bps) across tenors, a move aimed at making loans cheaper for customers.

The rate cut is effective from Tuesday (July 7), according to its website.

HDFC Bank said its overnight MCLR stands reduced to 7.10 percent, while one-month MCLR is 7.15 percent.

One-year MCLR, to which many of the consumer loans are tied, will now be 7.45 percent, while three-year MCLR has been set at 7.65 percent.

Tenor	MCLR in %
Overnight	7.10
1 month	7.15
3 month	7.20
6 month	7.30
1 year	7.45
2 year	7.55
3 year	7.65

The move comes amid similar steps taken by the peers after two rate cuts by the Reserve Bank of India (RBI) in order to help the economic growth rise in the aftermath of the COVID-19 pandemic.

Banks review their MCLR every month. Lately, some part of the lending has also been linked directly to external benchmarks, such as the repo rate, for a better transmission of policy actions.