HDFC Bank hikes base rate by 20 bps to 9.15%, IndusInd Bank hikes MCLR by 5 bps

This may not be a substantial hike on customer EMIs (equated monthly instalments). On a car loan of Rs 10 lakh for a three-year period, the increase in EMI would be about Rs 100.

The Mumbai-based bank had previously raised its base rate by 10 basis points (100 bps - 1 percentage points) to 8.95 percent on June 11.

Loans taken after April 2016 were offered at marginal cost-based lending rate (MCLR).

Effective September 17, IndusInd Bank also hiked its MCLR by 5 bps. Its overnight interest rates stand at 9 percent, one-month rates at 9.05 percent, one-year at 0.65 percent while three-year rates are at 9.75 percent. The mid-sized private bank’s base rate continues to stand at 10.55 percent.

Earlier this month, large banks like State Bank of India (SBI), ICICI Bank, Bank of Baroda and Union Bank of India have hiked their benchmark MCLR by 5 to 20 bps each.

On September 7, HDFC Bank raised its MCLR by 20 bps. Its overnight and one-month MCLR stands at 8.25 percent, three-month at 8.30 percent, one-year rate at 8.60 percent and three-year rate at 8.90 percent.

The increase in interest rates comes ahead of Reserve Bank of India’s monetary policy announcement due on October 4.

Amid positive softening of inflation data for August and stable industrial production (IIP) for July, the central bank is largely expected to maintain the key policy repo rate unchanged at 6.50 percent.