The country's leading private run lender HDFC Bank post the RBI's repo rate hike of 50 basis points last week has increased lending rates by 5-10 basis points across tenures. 1 basis point is one-hundredth of a percentage point.
The bank has increased its MCLR or marginal cost of funds based lending rate across all tenures by 5-10 basis points. The new hiked rates come into effect from August 8, 2022 i.e. today.
Marginal Cost of Funds based Lending Rate (MCLR) is the minimum rate below which banks are not allowed to lend. This lending rate benchmark substituted the previous base rate system for determining the lending rates for commercial banks. This system was made effective by the RBI on April 1, 2016 for deciding interest rate on loans.
In June this year, the bank increased interest rate on FD by 25 bps.