HDFC Bank has announced a rise in its Marginal Cost of Fund Based Lending Rate (MCLR). Effective from August 8, the new MCLR will be increased by 0.05 percent or 5 basis points.
As a result, the interest rates for loans based on the MCLR will now range from 9.10 percent to 9.45 percent.
Repo Rate Likely Unchanged
Typically, banks adjust their interest rates in line with changes in the RBI’s repo rate. The repo rate is set by the RBI’s Monetary Policy Committee (MPC), which is currently in session.
The MPC’s decisions will be announced on August 8. Analysts expect that the repo rate, currently at 6.50 percent, will remain unchanged.
What is MCLR?
MCLR is the minimum interest rate that banks must charge for loans. It reflects the lowest interest rate that a bank can offer on loans,
provided there are no changes from the Reserve Bank of India (RBI). This rate also affects existing customers with floating rate loans.
Updated Interest Rates
With the new MCLR, the updated interest rates for different loan tenures are:
Overnight: 9.10 percent
1 month: 9.15 percent
3 months: 9.25 percent
6 months: 9.40 percent
1 year: 9.45 percent
2 years: 9.45 percent
3 years: 9.45 percent
No Change Expected in Repo Rate
Typically, banks adjust their interest rates based on the RBI’s repo rate, which is set by the RBI’s Monetary Policy Committee (MPC).
The MPC meeting is currently in progress and the decisions will be announced on August 8. It is anticipated that the repo rate will remain unchanged at 6.50 percent.
