After the RBI's rate cut, private sector lender reduced its MCLR with effect from April 8. The rate cut will impact not just the new loans but also existing loans as the EMI will come down. Personal loans, auto and home loans are all set to get cheaper hence.
The MCLR for one-year tenure has been brought down to 8.65% as against 8.75% earlier. Similarly, six-months, three-months and one-month, MCLR has also been cut to 8.45 per cent, 8.35 per cent and 8.30 per cent respectively.
Other companies in the banking space will also follow suit to make their offerings competitive and lucrative at the same.
On April 4, the RBI in its first bi-monthly policy meet of current FY, had cut repo rate by 0.25 bps to 6 per cent. The current reverse repo rate stands at 5.75 per cent. The reuction in MCLR rate by the HDFC Bank will put pressure on other leading banks to match the same in order to keep their lending rate lucrative as well as competitive at the same time.
ICICI Bank on April 2 had slashed its MCLR by 0.05% for all loans on. The new rates for overnight and one-month tenors stand at 8.5 per cent, for three months at 8.55 per cent, for six months at 8.7 per cent and for one-year at 8.75 per cent.