HDFC Bank Announces MCLR Reduction and What It Means for Borrowers

HDFC Bank has announced a reduction in its Marginal Cost of Funds-based Lending Rate (MCLR), which could translate into lower EMIs for borrowers. This revision applies to various loan tenures and provides relief to customers with home, personal, and business loans linked to the bank’s MCLR. The reduction reflects the bank’s efforts to align lending rates with current economic conditions and cost of funds.

Details of the MCLR Revision

The MCLR, introduced by the Reserve Bank of India in 2016, represents the minimum interest rate a bank can charge on loans. It ensures that borrowers are not charged below the bank’s cost of funds unless specified. 

The bank has cut its MCLR by up to 15 basis points on select tenures. After the revision, HDFC Bank’s MCLR now ranges from 8.40% to 8.65%, down from the earlier range of 8.55% to 8.75%. The overnight MCLR has decreased from 8.55% to 8.45%, while the one-month rate now stands at 8.40%. 

The three-month rate has been reduced by 15 basis points to 8.45%, and the six-month and one-year rates are now 8.55%, down 10 basis points. Longer tenures, including the two-year and three-year rates, are set at 8.60% and 8.65% respectively.

Impact on Borrowers

Borrowers with loans linked to HDFC Bank’s MCLR, especially floating-rate loans, are likely to see a reduction in their EMIs. Home loan rates, calculated by adding a margin of 2.4% to 7.7% over the policy repo rate, currently range from 7.90% to 13.20% depending on the borrower’s profile and loan type. 

The MCLR cut helps reduce the financial burden on borrowers, making monthly repayments more manageable.Lowering the MCLR is a signal of how banks respond to changing economic conditions and monetary policy.

HDFC Bank Share Price Update

As of October 08, 2025, 1:44 PM IST, HDFC Bank (HDFCBANK) shares were trading at ₹982.30, down ₹0.20 or 0.02% from the previous close of ₹982.50. The stock opened at ₹976.00 and moved within a day’s range of ₹974.55 to ₹985.90. 

Trading volume stood at 1,01,02,440 shares. The 52-week price range has been ₹806.50 to ₹1,018.85, with a market capitalisation of ₹15,09,176 crore.

Read more:How Much Corpus Can You Create with a ₹3,000 SIP in the Nifty 50 Index Fund?

Conclusion

HDFC Bank’s MCLR reduction provides relief to borrowers, particularly those with floating-rate loans, by lowering EMIs and easing monthly repayments. The move reflects how banks adjust lending rates in line with economic conditions and cost of funds, offering borrowers a practical opportunity to manage interest expenses while maintaining financial flexibility.

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