HDFC Bank, India's largest private lender, cut its MCLR by up to 10 basis points across all tenures, effective September 7. This move will make many home, personal, and auto loans cheaper for borrowers.
10 basis points
MCLR Cut
⏳ Time Machine
How today’s news fits into the bigger picture
April 2016
RBI Introduces MCLR System
The Reserve Bank of India replaced the Base Rate system with the Marginal Cost of Funds-based Lending Rate (MCLR) to ensure better and faster transmission of policy rate changes to customers.
February 2023
RBI Pauses Rate Hikes
After a series of increases, the RBI paused its repo rate hikes, maintaining it at 5.25%. Banks generally responded by holding or marginally increasing their based on their own cost structures.
April 2026
HDFC Bank Hikes MCLR
HDFC Bank had previously increased its MCLR, following the broader market trend of rising interest rates in response to past RBI repo rate hikes. This led to higher EMIs for many borrowers.
September 2026
RBI Maintains Repo Rate
Just days before HDFC Bank's announcement, the RBI's Monetary Policy Committee decided to keep the repo rate unchanged at 5.25% for the fifth consecutive time, focusing on economic stability.
Today
HDFC Bank cut its MCLR by up to 10 basis points across all tenures, effective September 7.
What happens next?
Other banks are likely to follow suit to remain competitive, potentially leading to a broader trend of declining loan interest rates.
HDFC Bank, India's largest private sector lender, has announced a reduction in its Marginal Cost of Funds-based Lending Rate (MCLR) by up to **10 basis points (0.10%)** across all seven tenures. This change became effective from September 7, 2026. The reduction means that interest rates for various loans, including many home loans, personal loans, and auto loans that are benchmarked to the MCLR, will become slightly cheaper. This move is significant as it comes despite the Reserve Bank of India maintaining its key repo rate, suggesting a proactive step by HDFC Bank to ease lending conditions for customers.
💭 If you're wondering…
A basis point is a common unit of measure in finance, equal to one-hundredth of one percentage point (0.01%). So, a 10 basis point cut means a 0.10% reduction.
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