HDFC Bank hikes lending rates in select tenors by 0.05%

8 Nov 2023 , 11:02 AM

On November 7, HDFC Bank, the largest private sector lender, increased its lending rates for a few chosen loan tenors by a mere 0.05%. At its November 7 meeting, the asset liability committee of the city-based institution voted to increase the funding-based lending rates’ marginal cost by 0.05%, according to officials.

The move occurs despite the Reserve Bank of India (RBI) having not changed interest rates in five straight policy reviews. Following the integration of its parent company, HDFC Ltd, into its home finance business, the bank has disclosed a reduction of its net interest margins.

Additionally, banks offer an external benchmark-linked loan product that is re-priced in response to changes in the benchmark, such as requests for repo rates by the RBI. According to the updated rate structure, the three-year MCLR will now be 9.30% instead of the previous 9.25%, and the overnight MCLR has been increased from the previous 8.60% to 8.65%.

The one-year MCLR, which is linked to the majority of the loans, has remained at 9.20%, nevertheless.

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