New Delhi. Leading private sector bank, HDFC Bank has revised the marginal cost of funds-based lending rate (MCLR) rates for some tenures. The new rates became effective on November 7, 2024. The bank has increased the overnight MCLR rate to 9.15% and the one-month MCLR rate to 9.20%. However, the one-year MCLR rate, which is the key benchmark for auto and personal loans, has remained stable at 9.45%.

At the same time, SBI's one-year MCLR rate is 8.55%, ICICI Bank's one-year rate is 9.10%, and Punjab National Bank (PNB)'s is 9.20%. Bank of Baroda (BoB) is also working at a one-year rate of 8.70%. Other major banks provide loans to their customers at a slightly lower rate than HDFC, but for HDFC customers, this change can lead to an increase in EMI.

Impact of RBI policies
This increase has been made despite the Reserve Bank of India (RBI) keeping the interest rates stable, as banks like HDFC change the MCLR from time to time depending on their costs and market conditions.

What is MCLR
MCLR, or Marginal Cost of Funds-Based Lending Rate, is the minimum interest rate set by banks at which they lend loans. It was introduced by the Reserve Bank of India (RBI) in 2016 so that loan rates are more transparent and can adjust quickly according to changes in the market. MCLR is determined based on factors such as banks' cost of funding, operating costs, and cash reserves. Through this rate, bank loan interest rates are affected by the repo rate and other economic changes.