HDFC Bank raised lending rates across tenors, increasing the benchmark one-year marginal cost of funds based lending rate, or MCLR, by 5 basis points to 8.40 percent and hiking other tenors by as much as 10 basis points.
IMPACT ON BORROWERS
The one-year MCLR is used to price most consumer loans, such as auto, personal and home loans.
The maximum increase of 10 basis points was for the two-year tenor, to 8.55 percent from 8.45 percent, while the overnight, three-month, six-month and three-year MCLRs were each raised by 5 basis points, to 8.10 percent, 8.20 percent, 8.35 percent and 8.65 percent respectively.
MARKET AND POLICY CONTEXT
HDFC Bank's revision took effect on June 8, days after the Reserve Bank of India on June 5 kept interest rates unchanged for the second time in a row as it weighed the impact of rising energy prices and supply disruptions caused by the West Asia crisis.
Sources: The Hindu Business Line Banking
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