Now Reading: HDFC Bank cuts MCLR by 5 bps; home, personal loan EMIs may not fall immediately
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HDFC Bank cuts MCLR by 5 bps; home, personal loan EMIs may not fall immediately
HDFC Bank cuts MCLR by 5 bps; home, personal loan EMIs may not fall immediately
HDFC Bank has reduced its Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points across most tenures, effective August 7, 2026. The one-year MCLR, a key benchmark for many retail…
The Story in Brief
HDFC Bank has reduced its Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points across most tenures, effective August 7, 2026. The one-year MCLR, a key benchmark for many retail loans, now stands at 8.40% compared to the previous 8.45%. This move comes days after the Reserve Bank of India held the repo rate at 5.25%.
However, Times Now reports that existing borrowers with MCLR-linked floating-rate loans will not see an immediate EMI reduction. The actual impact depends on three factors: the benchmark applicable to the loan, the spread charged over that benchmark, and the loan's next reset date. RBI rules mandate a maximum reset period of one year for such loans, meaning any benefit could take up to 12 months to reflect.
The Indian Opinion
Headlines screaming 'loan EMIs set to fall' exaggerate the impact of HDFC Bank's 5 bps MCLR cut. The reality is far more modest. A borrower's actual rate depends on their loan's spread and reset date, which for MCLR-linked loans can be up to one year away. The RBI's repo rate pause, not this single cut, remains the bigger signal. The real test is whether other banks follow and how quickly lenders pass on the benefit through their reset cycles. Watch the one-year MCLR trend, not just today's headline.
Source: timesnownews.com
This story was synthesised by AI from the source linked above.
