HDFC Bank hikes benchmark marginal cost of funds-based lending rates (MCLR)

HDFC Bank Limited, also identified as HDB, is an Indian banking and financial services entity headquartered in Mumbai. It holds the distinction of being India’s largest private sector bank in terms of assets and is acknowledged as the fourth-largest bank globally by market capitalization, a position it achieved following its acquisition of the parent company HDFC. As of September 6, 2023, HDFC Bank is positioned as the third-largest company by market capitalization on Indian stock exchanges, amounting to an impressive $150 billion. Beyond its financial standing, HDFC Bank plays a significant role in employment, ranking as the sixteenth-largest employer in India with a workforce comprising nearly 1.73 lakh employees.


HDFC Bank, a private sector lender, has recently raised its Marginal Cost of Funds-Based Lending Rates (MCLR) on specific tenures. The revised rates, effective from October 7, 2023, are as follows:

  1. Overnight MCLR: 8.60%
  2. 1 Month MCLR: 8.65%
  3. 3 Month MCLR: 8.85%
  4. 6 Month MCLR: 9.10%
  5. 1 Year MCLR: 9.20%
  6. 2 Year MCLR: 9.20%
  7. 3 Year MCLR: 9.25%

These MCLR adjustments serve as a benchmark for various loans, including consumer loans, provided by the bank. The increase in MCLR indicates a higher cost of funds for the bank, which may influence the interest rates on loans for consumers. Borrowers, particularly those with loans linked to MCLR, should be aware of potential changes in their loan EMIs (Equated Monthly Installments) based on these updated rates. Staying informed about such modifications and seeking clarification from the bank about the specific implications for individual financial arrangements is advisable.

MCLR, or the Marginal Cost of Funds-Based Lending Rate, represents the minimum interest rate required for specific loans, functioning as a benchmark or the lower limit for lending rates. Starting from October 1, 2019, all banks, including the State Bank of India (SBI), are mandated to provide loans at interest rates linked to external benchmarks, such as the Reserve Bank of India’s (RBI) repo rate or Treasury Bill yield. The recent decision of the Monetary Policy Committee (MPC) to maintain the policy repo rate at 6.50% for the fourth consecutive time was communicated by Reserve Bank of India Governor Shaktikanta Das after the MPC meeting on October 6.

Simultaneously, HDFC Bank has adjusted its fixed deposit interest rates for specific durations. Following the latest changes, the bank now offers general customers interest rates ranging from 3% to 7.20% on deposits maturing over periods spanning 7 days to 10 years. Senior citizens, in contrast, can earn interest rates varying from 3.5% to 7.75% on these deposits. These revised rates came into effect from October 1, 2023.