More banks are now hiking their lending rates after the RBI raised the policy repo rate last week by 50 basis points. HDFC Bank and IDFC First Bank have raised their marginal cost of funds-based lending rate (MCLR). MCLR is the minimum lending rate below which banks are not allowed to lend. From October 1, 2019, all banks have to offer floating rate loans only at an interest rate linked to an external benchmark such as the RBI’s repo rate.

However, some of the customers continue to remain under the MCLR regime. HDFC Bank has raised the MCLR by up to 10 basis points across various tenors, which will increase the EMIs for its customers. The one-year MCLR against which home loans are priced will be 8.10 per cent. The lender has also revised MCLR on other tenors such as overnight and one month, six months, two years and three years at 7.80 per cent, 7.85 per cent, 7.95, 8.20 per cent and 8.30 per cent, respectively. IDFC First Bank has raised MCLR by up to 15 basis points across various loan tenors. The changes came into effect on Monday. The bank’s 1-year rate now stands at 8.95 per cent. Earlier, PNB, Bank of Baroda, Canara Bank and RBL Bank had raised their rates.