New Delhi: Private sector lender, HDFC Bank became the first lender in the country to pass on the RBI rate hike to customers. The Mumbai-based lender hiked its marginal cost of funds based lending rate (MCLR) by 10 basis point on Thursday for various maturities. Following this revision in MCLR, new loans and existing home and auto loans (which have been issued on floating rate basis) will become expensive. Other banks are also expected to follow soon.
RBI yesterday increased repo rate by 25 basis point to 6.25 per cent citing inflation risk. Repo rate is the rate at which RBI lends short-term funds to banks. Following the increase in repo rate cost of funds for banks is expected to increase.
Even before the RBI rate hike, state-owned lenders like State Bank of India, Bank of Baroda and Punjab National Bank earlier this month hiked their lending rates by 5-10 basis points.