HDFC Bank has increased its marginal cost of funds-based lending rates (MCLR) for select short-term tenors, effective November 7, 2024. The revision, which sees an expansion of up to 5 basis points (bps), is applicable across overnight, 1-month, and 3-year tenors.
After this inflation, the overnight MCLR has flourish from 9.10% to 9.15%, while the one-month MCLR has jump from 9.15% to 9.20%. At the same time, the 3-year MCLR has inflation from 9.45% to 9.50%.
There is no change in rates for periods other than these three periods.
The three-month MCLR remains at 9.30%, while the six-month and one-year MCLR are both fixed at 9.45%. Similarly, the two-year MCLR also remains at 9.45%.
With this adjustment, the complete MCLR structure is now as follows: Overnight rate is 9.15%, 1 month rate is 9.20%, 3 month rate is 9.30%, 6 month rate is 9.45%, 1 year rate is 9.45%, 2 year rate is 9.45%, and 3 year rate is 9.50%.
What is MCLR and who does it affect?
MCLR, or Marginal Cost of Funds-based Lending Rate, is the minimum interest rate below which banks cannot lend. Introduced by the Reserve Bank of India (RBI) in 2016, MCLR replaced the base rate system.
Loan borrowers who are linked to MCLR will see changes in their loan EMIs when there are fluctuations in MCLR rates.
For those who have taken loans before 2016, the base rate or Benchmark Prime Lending Rate (BPLR) is still applicable.
When MCLR increases, the EMI of home, personal and business loans also inflation.
