HDFC Bank hikes lending rates by 0.35%; 2nd hike in two months

The hike comes a day ahead of the RBI's scheduled policy review

The country's largest private sector lender HDFC Bank on Tuesday announced a 0.35% hike in lending rate.

The hike, which comes a day ahead of the RBI's scheduled policy review, is the second such move from the lender in as many months, taking the cumulative hike to up to 0.60%.

The RBI had surprised all with a 0.40% hike in key interest rates on May 4 to tame the inflation situation and is widely expected to follow up with further tightening of the policy on Wednesday.

HDFC Bank increased its Marginal Cost of funding based Lending Rate by 0.35% from June 7, as per the new rate structure published on its website.

The one-year MCLR, on which a bulk of consumer loans are pegged, will be 7.85% after the newest review as against 7.50% earlier.

The overnight MCLR will be 7.50% against 7.15%, while the three-year MCLR will be 8.05% compared to 7.70%.

It can be noted that the rate hikes come at a time when credit growth is not very high and banks are keen to accelerate on the same. There have been hikes in deposit rates as well, which have preceded the lending rate hikes, along with the change in the policy environment.