HDFC Bank raises MCLR on loans by up to 10 basis points

Private sector lender HDFC Bank increased its marginal cost of funds-based lending rate (MCLR) on loans for all tenures by up to 10 basis points (100 basis points = 1%). The new loan rates will be effective from August 8, 2022.

As a result, borrowers will witness an increase in monthly equivalent payments (EMI) for various types of loans, which will increase the cost of housing, vehicles, personal loans and the like once the loan reset date arrives.

According to

website, the overnight MCLR is now 7.80%, up from 7.70% a 10 basis point rise. The MCLR for one month is 7.80%. The three-month and six-month MCLRs will be 7.85% and 7.95%, respectively. The one-year MCLR, which is tied to many consumer loans, will now be 8.10%, the two-year MCLR will be 8.20%, and the three-year MCLR will be 8.30%.

Last month, HDFC Bank raised the MCLR by 20 basis points (on July 7, 2022) and 35 basis points (on June 7, 2022).

On the reset date, the bank will increase your mortgage interest rate in accordance with the current MCLR. Your interest rate will therefore increase in August if your loan reset date is in August, and it is tied to the MCLR rate.

RBI raises its repo rate

In its policy review on Friday, the Reserve Bank of India raised the repo rate, the primary policy rate, by 50 basis points.

In May, the RBI raised the repo rate by 40 basis points. The RBI also raised the repo rate by 50 basis points with each review of its monetary policy in June and August. Due to rising inflation, the central bank raised rates aggressively. Over the past six months, retail price inflation has remained consistently high at over 6%.