Canara Bank and HDFC Bank hike MCLR, month after RBI raised repo rate

Canara Bank's overnight and one-month MCLR are at 6.75 per cent now and HDFC Bank's website, the private lender's overnight MCLR now stands at 7.70 per cent

Canara Bank and HDFC Bank have increased their marginal cost of funds-based lending rates (MCLR) by 10 basis points and 20 basis points, respectively, with effect from July 7.

State-owned Canara Bank’s overnight and one-month MCLR are at 6.75 per cent now. The three-month MCLR is now at 7.05 per cent; six month MCLR is at 7.45 per cent; and one-year MCLR is at 7.50 per cent, information put out on the bank’s website revealed.

As per HDFC Bank’s website, the private lender’s overnight MCLR now stands at 7.70 per cent; the one-month MCLR is at 7.75 per cent; 3-month MCLR is at 7.80 per cent; six-month MCLR is at 7.90 per cent; one-year MCLR is at 8.05 per cent; 2-year at 8.15 per cent; and 3-year MCLR at 8.25 per cent.

According to the latest Reserve Bank of India (RBI) data, as of March 2022, about 43.6 per cent of loans of scheduled commercial banks is linked to the MCLR.

The RBI’s six-member monetary policy committee (MPC) on June 8 raised the benchmark interest, the repo rate, by 50 basis points to 4.90 per cent to tame the rising headline inflation. Previously, the MPC had raised rates by 40 basis points.

HDFC Bank last raised its MCLR by 35 basis points in June, a day prior to the MPC meeting. It had also hiked its MCLR by 25 bps in May. A few other lenders such as ICICI Bank, Punjab National Bank, and Indian Bank had raised their MCLR last week, post the MPC’s decision to hike repo rate.