personal finance

HDFC Bank cuts MCLR for 2,3 year loans by 5 basis points: Home loans get cheaper


The country’s largest private sector lender, HDFC Bank, has reduced its marginal cost-based lending rate (MCLR) for loans of two- and three-year tenors by 5 basis points to 8.85 percent and 9 percent, respectively. The new rates are effective from March 7, according to the bank‘s website. However, the MCLR for overnight, one month, three months, six months and 1-year tenor loans remain the same at 8.35 percent, 8.4 percent, 8.45 percent, 8.55 percent and 8.75 percent, respectively. Earlier, the rates for two- and three-year tenors stood at 8.9 percent and 9.05 percent, respectively.

Adhil Shetty, CEO, Bankbazaar.com says that following the Reserve Bank of India’s (RBI) nudge, lenders have reduced loan rates. After the RBI’s repo rate reduction of 25 basis points in February, banks didn’t immediately start transmitting the full value of the cut to customers. “So far we’ve seen only 5 to 10 basis points being passed on to customers. HDFC Bank has reduced its 2-year and 3-year MCLR by 5 basis points. This would impact only those deposits and lending products benchmarked to those tenors. HDFC Bank’s home loans are benchmarked against the retail prime lending rate (RPLR),” he said.

HDFC Bank over the past year, has been steadily increasing its MCLR. In January, the lender raised the MCLR rates for one, two and three-year loans 5 basis point to 8.75 percent, 8.90 percent and 9.05 percent, respectively. Also, in December 2018 the rate was hiked by 5 basis point for one, three and six-month.

HDFC Bank isn’t the only bank that has reduced rates over the last month. Since RBI’s bi-monthly policy review in February 2019, others banks, too, have been cutting rates marginally.

Bank of Baroda

On March 5, Bank of Baroda reduced its benchmark lending rate by 0.1 percentage point, a move that would make its home, auto and other loans cheaper. The bank has reduced the lending rate by 10 bps across all tenors up to one year. The MCLR for overnight and one-month tenors would be 8.25 percent and 8.30 percent, respectively.

Punjab National Bank

Punjab National Bank on February 27, 2019, reduced the MCLR by 0.10 percentage point for various tenor loans effective March 1, 2019. The one-year tenor has been cut to 8.45 percent from 8.55 per cent. The three-year MCLR has been cut to 8.65 percent. The rates for overnight, one/three/six-month MCLRs are also down by 10 basis points each at 8.05 per cent, 8.10 percent and 8.15 percent respectively.

State Bank of India

SBI had, on February 8, just four days after the RBI policy, announced a cut in home loan rates by 0.05 percentage point for loans up to Rs 30 lakh.





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