As of March 2025, several major banks, including HDFC Bank, Bank of Baroda, Punjab National Bank (PNB), Canara Bank, and IDBI Bank, have revised their lending rates. These changes can impact loans linked to the Marginal Cost of Funds-based Lending Rate (MCLR).
Here’s a simplified breakdown of the latest MCLR updates:
Canara Bank Lending Rates:
Overnight MCLR: Reduced by 5 basis points (bps) from 8.35% to 8.30%.
One-month MCLR: No Change Remains at 8.35%.
Three-month MCLR: No Change Remains at 8.55%.
Six-month MCLR: No Change Remains at 8.90%.
One-year MCLR: No Change Remains at 9.10%.
Two-year MCLR: Reduced by 10 bps from 9.35% to 9.25%.
Three-year MCLR: Reduced by 15 bps from 9.45% to 9.30%.
HDFC Bank Lending Rates:
One-month MCLR: Remains at 9.20%.
Three-month MCLR: Remains at 9.30%.
Six-month and One-year MCLRs: No change, both remain at 9.40%.
Two-year MCLR: Reduced from 9.45% to 9.40%.
Three-year MCLR: Remains unchanged at 9.45%.
Effective Date: March 7, 2025.
Bank of Baroda Lending Rates:
Overnight MCLR: Remains at 8.15%.
One-month MCLR: Remains at 8.35%.
Three-month MCLR: Remains at 8.55%.
Six-month MCLR: Remains at 8.80%.
One-year MCLR: Remains at 9%.
Effective Date: March 12, 2025.
Bank of India Lending Rates:
Overnight MCLR: Remains at 8.25%.
One-month MCLR: Remains at 8.45%.
Three-month MCLR: Remains at 8.60%.
Six-month MCLR: Remains at 8.85%.
One-year MCLR: Remains at 9.05%.
Three-year MCLR: Remains at 9.20%.
Effective Date: March 1, 2025.
IDBI Bank Lending Rates:
Overnight MCLR: Remains at 8.45%.
One-month MCLR: Remains at 8.60%.
Three-month MCLR: Remains at 8.90%.
Six-month MCLR: Remains at 9.15%.
One-year MCLR: Remains at 9.20%.
Two-year MCLR: Remains at 9.75%.
Three-year MCLR: Remains at 10.15%.
Effective Date: March 12, 2025.
Key points about MCLR:
– MCLR stands for Marginal Cost of Funds-based Lending Rate. It’s the minimum interest rate that banks can charge borrowers.
– The Reserve Bank of India (RBI) introduced the MCLR system on April 1, 2016, to help banks set their lending rates.
– However, from October 1, 2019, the MCLR system was replaced by the External Benchmark-based Lending Rate (EBLR). This change was made to ensure that lending rates are more closely aligned with RBI’s policy rates. All new floating-rate loans now follow the EBLR system. But many borrowers who took loans under the MCLR system still haven’t switched to the EBLR system and continue to pay interest based on the old MCLR rates.
Impact on Borrowers
These changes will affect borrowers with loans linked to the MCLR system, such as home loans, personal loans, and business loans.
Borrowers should stay updated on the latest rates to make better financial decisions.