HDFC Bank has increased rates on its loan offerings by 0.25 per cent, joining its peers that have raised lending rates after the surprise tightening of the monetary policy by the RBI.

The bank has hiked the marginal cost of funding based lending rate (MCLR) by 0.25 per cent across tenors from May 7. The one-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.

Bank of Maharashtra

State-owned Bank of Maharashtra on Monday said it has raised the MCLR across tenors by 0.15 per cent to 7.40 per cent from 7.25 per cent earlier. The MCLR for the other tenors ranging from overnight to one to three and six months was raised by the same margin.

Further, the bank said it has raised the repo linked lending rate (RLLR) from 6.80 per cent to 7.20 per cent per annum with effect from May 7. Meanwhile, Karur Vysya Bank also announced that it has revised the external benchmark rate to 7.45 per cent from 7.15 per cent.

The Reserve Bank hiked its repo rate at which it lends to the system by 0.40 per cent to help tame inflation, which is consistently breaching the upper end of its target level.

The central bank also sucked out Rs 87,000 crore of excess liquidity in the system by hiking the cash reserve ratio by 0.50 per cent. Some loans that 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 a review in the MCLR by a bank’s asset-liability committee according to the formula.