HDFC Bank Slashes Loan Rates! Borrowers Get Major EMI Relief - Full Details Inside!

HDFC Bank announced a reduction in its Marginal Cost of Funds-based Lending Rates (MCLR) by up to 10 basis points (bps), effective from November 7. This adjustment impacts several loan tenures, bringing the new MCLR range to between 8.35% and 8.60%, down from the previous 8.45% to 8.65%.

Borrowers with loans such as home, auto, or personal loans linked to the MCLR will experience a decrease in their interest rates during their next reset period. However, customers whose loans are tied to external benchmarks like the Reserve Bank of India's (RBI) repo rate will not be affected by this specific change.

Impact: This reduction in MCLR can put slight pressure on HDFC Bank's net interest margins (NIMs) as lending rates decrease. However, it is likely to be perceived positively by borrowers, potentially increasing customer satisfaction and loan demand. The move could also prompt other banks to review their own MCLR rates. Overall impact on the Indian stock market is moderate, reflecting a competitive banking environment. Rating: 5/10.

Difficult Terms: Marginal Cost of Funds-based Lending Rate (MCLR): An internal benchmark rate set by banks to determine the interest rates for loans. It is calculated based on the bank's marginal cost of funds, operating expenses, and a negative or positive spread. It was introduced by the Reserve Bank of India to improve the transmission of monetary policy to borrowers.