Mumbai: Largest private sector lender HDFC Bank Tuesday has cut its lending rates by 0.10 percent across all tenors, effective Wednesday, sources said.
The move comes a day ahead of the policy review by the Reserve Bank, which is reportedly peeved at lenders for not passing on its three consecutive rate cuts of 0.75 percent to the borrowers.
A slew of lenders have marginally lowered their lending rates over the past few weeks, including the largest lender SBI, which cut its marginal cost of funds-based lending rate or MCLR by 0.05 percent.
With this, the new pricing of HDFC Bank's one-year MCLR comes at 8.60 percent, the sources said, adding the new pricing is applicable from Wednesday.
"MCLR has been cut across all tenors,"the source said.
Starting with overnight rate, the MCLR durations extend up to three years, with long duration products like home and auto loans linked to the one-year rate.
For such products, banks have a mark-up over the one year MCLR depending on the risk perceptions, which becomes the final rate.
The Reserve Bank is widely expected to cut its key rate by 0.25 percent for the fourth consecutive times at the policy review Wednesday, to prop up the sagging growth.
Union finance minister Nirmala Sitharaman has asked banks to cut rates deeper, helped by the easy money policy of the central bank.