Joining its peers that have raised lending rates after the surprise tightening of the monetary policy by the RBI, the country's largest private sector lender HDFC Bank has also upped rates on its offerings by 0.25 per cent.
The bank has hiked the marginal cost of funding-based lending rate (MCLR) by 0.25 per cent across tenors from May 7, as per its website.
The 1-year MCLR - the rate to which a majority of consumer loans are linked - has been revised to 7.50 per cent, while the overnight MCLR is 7.15 per cent, it showed.
The Reserve Bank hiked its repo rate at which it lends to the system by 0.40 per cent to help tame the inflation, which is consistently breaching the upper end of its target level. It also sucked out Rs 87,000 crore of excess liquidity in the system by hiking the cash reserve ratio (CRR) by 0.50 per cent.
Immediately after the RBI moves, a slew of lenders responded by hiking both lending and deposit rates. Some loans, which are linked to external benchmarks like repo rates get repriced automatically with a rate review by the RBI, while others linked to the MCLR get repriced with the review in the MCLR by a bank's asset-liability committee as per the formula.
