HDFC Bank, the country’s largest private sector bank, cut its marginal-cost based lending rate (MCLR) on loans for all tenors by 10 basis points (bps). The reduction in HDFC Bank’s lending rate will make EMIs on home and other loans tied to its marginal cost of funds based lending rate cheaper.

According to the HDFC Bank website after the latest rate reduction, its overnight MCLR stands reduced to 7 per cent, while one-month MCLR is 7.05 per cent. Three- month and six-month MCLR stand at 7.10 per cent and 7.20 per cent respectively. One-year MCLR, to which many of the consumer loans are linked, will now be 7.35 per cent, two-year MCLR will now be 7.45 per cent, while three-year MCLR has been set at 7.55 per cent.

State-run Canara Bank too announced a reduction in its MCLR by up to 30 basis points across various tenors. The revised lending rates will be effective from August 7, Canara Bank said.

The second-largest private sector lender ICICI Bank also cut its lending rates by 10 basis points (bps) across all tenors effective 1st August. After cutting interest rates by 115 basis points since February, the Monetary Policy Committee (MPC) after three days of deliberations voted unanimously to leave the policy repo rate unchanged at 4 per cent. The MPC also decided to ‘continue with the accommodative stance of monetary policy as long as necessary to revive growth, mitigate the impact of COVID-19 while ensuring that inflation remains within the target’ zone, RBI Governor Shaktikanta Das said.