HDFC Bank cuts MCLR by up to 10 bps

The country’s largest private sector lender, HDFC Bank, cut its marginal-cost based lending rate (MCLR) for various tenors by up to 10 basis points (bps). According to the bank’s website, it has cut the 6-month MCLR by 5 bps to 8.1 percent, 1-year rate by 5 bps to 8.3 percent, 2-year by 5 bps to 8.4 percent, and the 3-year rate by 10 bps to 8.5 percent. These new rates will be effective from November 7, i.e., today.

It has kept the overnight, 1-month and 3-month MCLR rates unchanged.


The last time HDFC Bank cut MCLR rates was in August. That time it had cut rates across all tenors by 10 bps.

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Since the start of year, the Reserve Bank of India (RBI) has cut the repo rate five times in a row for a total of 135 bps. Following suit, banks too, have been cutting interest rate on loans albeit not at the same rate.

To make the rate transmission happen faster, RBI had mandated all banks to move from the MCLR regime to externally benchmark all their floating rate loans. Most public sector banks, like State Bank of India, Central Bank of India and so on, have started offering loans linked to an external benchmark. However, private sector lenders like HDFC Bank are yet to move to the new regime.