Latest news with #MCLR
New Indian Express
a day ago
- Business
- New Indian Express
MPC outcome: RBI seen poised for aggressive rate cut
CHENNAI: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, concludes its three-day meeting today (June 6, 2025). Amid escalating global trade tensions stemming from new US tariffs imposed by President Donald Trump, expectations are mounting for an aggressive monetary easing by the RBI. Markets and analysts widely anticipate a 25 basis points (bps) cut, with some forecasting a jumbo 50 bps reduction to sustain domestic growth momentum and offset external headwinds. With recent cuts February and April this year by 25 bps each, the current REPO rate stands at 6%. These cuts have already prompted commercial banks to pass on benefits through reductions in External Benchmark-based Lending Rates (EBLRs) and Marginal Cost of Funds-based Lending Rates (MCLR), indicating effective policy transmission so far. Key Drivers Behind Rate Cut Expectations 1. Global Economic Uncertainty Trade Tensions: President Trump's renewed tariff actions have stoked fears of a global economic slowdown, weakening investor sentiment and external demand for Indian exports. Oil Prices & Global Demand: Volatility in crude oil markets due to geopolitical tensions may strain India's import bill and inflationary trajectory. 2. Domestic Growth Concerns India's Q1 FY26 GDP growth showed signs of deceleration due to weaker exports and subdued private consumption. Industrial production has softened, and the Purchasing Managers' Index (PMI) readings for both manufacturing and services have moderated slightly. 3. Benign Inflation Outlook Headline CPI inflation remains within the RBI's medium-term target range of 4%. Food inflation, although showing seasonal upticks, is largely under control. Core inflation remains muted due to weak demand. 4. Fiscal Policy Stance The Union Government's fiscal policy continues to be growth-supportive, but with limited space for large-scale stimulus, pressure shifts to the RBI for counter-cyclical support. Market Expectations The market expects another 25 bps cut as the most likely outcome the latest MPC meeting, aligning with RBI's cautious and data-dependent approach. However, there is a strong possibility of 50 bps cut if the RBI opts for preemptive, front-loaded easing to bolster sentiment and activity. Although unlikely, but not off the table, RBI may even opt for a status quo if the it views current liquidity and rate settings as adequate. Implications of a Rate Cut In the current scenario the impact of 25 bps cut will result in the rate of 5.75%, which can provide moderate boost to liquidity and credit demand The market watchers observe that the June 2025 MPC meeting is likely to result in at least a 25 bps repo rate cut, with a 50 bps cut a close contender given the increasing external risks and domestic growth slowdown. The decision will reflect the RBI's assessment of global trade dynamics, domestic inflation stability, and the effectiveness of past transmission. A forward-looking and accommodative stance is expected to continue, with future action contingent on evolving macroeconomic indicators and external shocks, said a banking sector analyst.
Time of India
07-05-2025
- Business
- Time of India
HDFC Bank cuts these lending rates by up to 15 bps; check details
Live Events How does MCLR affect borrowers? Latest HDFC Bank lending rates Effective Date: May 07, 2025 Tenor MCLR Overnight 9.00% 1 Month 9.00% 3 Month 9.05% 6 Month 9.15% 1 Year 9.15% 2 Year 9.20% 3 Year 9.20% HDFC Bank has announced a reduction in its Marginal Cost of Funds-based Lending Rates (MCLR), which will benefit borrowers whose loans are linked to this benchmark. The bank has lowered the MCLR by up to 15 basis points (bps) on select loan tenures. A basis point is one-hundredth of a percentage point, so a 15 bps cut translates to a 0.15% decrease in interest this revision, HDFC Bank's MCLR now ranges from 9.00% to 9.20%, depending on the loan tenure. This is a decrease from the previous range of 9.10% to 9.35%, which was applicable during April 2025. The revised MCLR rates have come into effect from May 7, read: Personal loan interest rates May 2025: Which bank is offering the lowest interest rate? This move by HDFC Bank comes in the wake of the Reserve Bank of India (RBI) reducing the repo rate by 25 bps in April, bringing the total cut to 50 bps since February 2025. The repo rate is the rate at which the RBI lends money to commercial banks, and a reduction in this rate typically leads to lower borrowing costs across the banking sector. As a result, several banks, including HDFC Bank, have started to pass on the benefits of lower funding costs to customers by reducing lending with MCLR-linked loans—such as home loans—may see a reduction in their EMIs (equated monthly installments) or a shorter loan tenure, depending on their loan terms and reset read: Cheaper home loan from Bank of Baroda: Lowest rate starts from 8% for these borrowers The MCLR is a benchmark rate used by banks to determine interest rates on various floating-rate loans, including home loans, personal loans, and auto loans. A decrease in MCLR translates to a potential drop in loan EMIs or a shorter loan tenure, benefiting borrowers in the long term. This will impact whether borrowers have chosen if it's a fixed loan or a floating rate bank has reduced the overnight and one-month MCLR tenures by 10 bps, from 9.10% to 9%. The three-month MCLR has been cut from 9.20% to 9.05%, down by 15 bps and the six-month MCLR has been reduced from 9.30% to 9.10%. The one-year MCLR rates have been reduced from 9.30% to 9.15%, down by 15 bps. The two year- MCLR is reduced by 10 bps from 9.30% to 9.20%. The three-year MCLR has been reduced from 9.35% to 9.20%.What is MCLR?The Marginal Cost of the Fund-Based Lending Rate or the MCLR is the minimum interest rate a financial institution needs to charge for a specific loan. It dictates the lower limit of the interest rate for a loan. This rate limit is set in stone for borrowers unless specified otherwise by the Reserve Bank of India. The RBI introduced the MCLR in 2016.
Economic Times
02-05-2025
- Business
- Economic Times
Interest rates are falling, time to switch your home loan regime: Save above Rs 8 lakh by switching to EBLR; Know how
What is EBLR? Live Events How much savings in monthly home loan EMI can you expect after switching to EBLR rate? Home loan's outstanding balance: Rs 30 lakh Remaining tenure of the home loan: 15 years EBLR EMI at 8.65%: Rs 29,807 Table showing the calculation of home loan EMI savings on switching to EBLR Interest Rate Regime MCLR BPLR Base rate Existing interest rate 9% 11.15% 10.40% Current EMI Rs 30,428 Rs 34,381 Rs 32,976 Monthly savings by shifting to EBLR Rs 621 Rs 4,574 Rs 3,170 Annual savings by shifting to EBLR Rs 7,457 Rs 38,036 Rs 32,976 Total Savings during repayment Rs 1,11,859 Rs 5,70,540 Rs 8,23,402 What are the charges which bank levy for such a shift in interest rate regime and generally how long does it take for such a request to process? Interest rates have started falling recently, with most of the lenders reducing their interest rates after the Reserve Bank of India (RBI) cut the repo rate by 0.5% within a span of two months. The lower interest rates will result in huge savings for home loan borrowers, as their home loan EMI will come down. If they decide to pay the same EMI amount, despite a rate cut, their home loan will be repaid much faster, and they will save a good amount on interest. However, not all home loan borrowers will benefit equally. The benefit of these cuts depends on their interest rate the biggest question is: which interest rate regime will offer you lower home loan EMIs? There are four interest rate regimes, which vary based on the timing of your home loan acquisition. Borrowers who secured their home loans before 2010 had the option to take them on the BPLR rate, and those who took their home loans between July 1, 2010, and March 31, 2016, had to take them on the base rate. Similarly, those who took their home loans between April 1, 2016, and September 30, 2019, had to take them on a Marginal Cost of Funds-based Lending Rate (MCLR). However, from October 1, 2019, the External Benchmark Lending Rate (EBLR) replaced MCLR. So, the question arises—which interest rate regime (BBLR, base rate, MCLR or EBLR) can make the case for a lower home loan interest cost and thus a lower home loan EMI?Read below to find out how much money you can save by switching interest rate to or External Benchmark Lending Rate, is a framework used by banks in India to set interest rates on home loans, where the rates are directly linked to an external benchmark, such as the RBI's repo rate. This means that when the RBI adjusts its repo rate, EBLR-linked loan rates can also who took out a home loan before EBLR have to pay a higher home loan EMI. This is because the EBLR rate is considered one of the most competitive rates amongst all regimes, and now it offers one of the lowest interest rates after the RBI cut the repo rates twice by 0.25% in its last two monetary policy Kumar, a SEBI-registered RIA and Founder of SahajMoney, says, 'EBLR is directly linked to the RBI's repo rate (6.00% (repo rate) + 2.65% spread), making it more transparent and reflective of interest rate scenarios.'While EBLR was launched, banks offered all existing borrowers the option to switch to EBLR; however, not all borrowers exercised that you are among them, then chances are that you would still be paying a higher interest rate on your home loan. It is the time to check the interest rate on your home loan and take action to save on the interest amount that you are paying just because of being to CEO Adhil Shetty, the older benchmark rates are stickier in comparison to BPLR. 'Around 40% of all floating rate bank loans are still on MCLR and BPLR, where the rates may be much higher compared to repo-linked loans. So, it's advisable to speak to your bank and convert your loan to a repo-linked one,' he home loan interest rates are falling, calculations show that it is beneficial for borrowers to shift to EBLR rate if their home loan is under MCLR or base rate or BPLR per the calculations, if the EMI on EBLR rate (8.65%) is Rs 29,807 then you can save up to 38,036 in a year in comparison with BPLR. In comparison with MCLR you can save up to Rs 7,457 in a SahajMoneyAssumptions:1. BPLR rate is after 4% discount by bank2. In EBLR there are 2 additional charges CRP (Credit Risk Premium) and BSP (Business Strategic Premium) that change with credit profile and with product. We have considered only 8.65% without CRP and BSP.3. EBLR stays constant at 8.65% and other interest rates does not can change your home loan interest rate regime any day you wish as your bank will process your request if you apply to switch your home loan to Sharma, Founder- Radian Finserv, says, "Banks typically charge a nominal conversion or administrative fee, around Rs. 5000 + GST. The shift usually takes 7 to 15 working days, depending on the bank's internal process and borrower documentation. It's a one-time cost that can result in long-term savings."Shetty agrees with Sharma and says if you are converting your loan with the same bank, you are usually charged a processing fee. The turnaround time for this conversion is generally a few days and usually there is no paperwork involved since the property's documents are already with the when transferring home loan to another bank and converting it into EBLR can mean incurring a cost of 0.5% to 1% of the loan says transferring your loan to a new bank makes sense where there's a substantial discount in interest rates being offered along with other benefits like easier pre-payment terms.'The cost of a transfer is usually 0.5-1% of the loan. The costs include processing fee, legal fees, MOD charges, and pre-EMI interest on the new loan, and pre-closure costs (such as simple interest or pre-closure fees) on the old loan. You will easily recover the costs in a year if the rate difference is substantial. The Turnaround time is typically a fortnight, but may get lengthier if the bank insists on additional scrutiny,' says Shetty.
Time of India
24-04-2025
- Business
- Time of India
Work on Delhi One to start after 7 yrs as Max takes over
Noida: Max Estates Ltd has officially acquired the dormant Delhi One in Sector 16B after receiving approvals from National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT), ending a seven-year stalemate and paving the way for construction to begin on the project off DND Flyway. To come up on 10 acres, Delhi One is set to offer a development potential of around 2.5 million square feet. Officials said the mixed-use complex would feature ultra-luxury serviced apartments, premium office spaces, retail outlets, and an exclusive club. The project is likely to earn a total revenue of over Rs 2,000 crore — with Rs 500 crore from existing customers and Rs 1,500 crore from new sales. It is also estimated to generate an annual rental income of more than Rs 120 crore. Before taking the project over, Max has had to make some tweaks to the design. Under a resolution plan approved by tribunals, around 240 existing residential buyers will be shifted to a dedicated serviced apartment tower. The remaining two housing towers will be reused for commercial purposes, while a proposed hotel will be replaced by an office. Existing retail buyers will receive accommodation in commercial spaces, with a 1.4-time increase in super area, according to the resolution plan. The project is likely to be ready in about five years. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like News For Jack Nicholson, 87, He Has Been Confirmed To Be... Reportingly Undo Sahil Vachani — vice-chairperson and managing director of Max Estates — suggested that the company intended to deliver a world-class real estate experience to those living and working in NCR. He described Delhi One as Max Estates' first integrated campus. "We are excited to bring it to life," he added. Launched initially by Boulevard Projects Pvt Ltd — a special purpose vehicle of Three C Group — the project faced prolonged delays because of financial and legal challenges. Max acquired the company through insolvency proceedings in Feb 2023 and secured a final clearance from NCLAT in Oct last year. But this was not before the project surpassed several funds hurdles. Although Noida Authority raised dues worth Rs 932 crore, Max proposed Rs 325 crore under the tribunal-approved plan. The Authority disagreed with this arrangement and took the matter up with NCLAT. Max, meanwhile, filed a revision application before the state govt, which allowed the company in June 2024 to present its proposal to the Authority board. Max requested a waiver of interest, rent, and compounding charges, and sought a zero-period waiver for the period between Aug 2013 and Aug 2015, when construction of the project was halted because of an NGT ban. This request would have reduced dues to Rs 542 crore. The Authority, eventually, approved a settlement at Rs 613 crore, with interest linked to SBIs MCLR. Max, in keeping with the agreement, needed to pay 25% of the recalculated amount upfront. The Authority granted a three-year extension for completing the Delhi One project , but clarified it would impose penalties for delays beyond this term. Lease rent remained under standard norms, which means there would be no additional fees for time extension. Max Estates, its officials said, intends to develop Delhi One into a "modern integrated facility", leveraging its expertise in luxury and commercial real estate. There are four towers in the complex that are currently functional. Construction has resumed on one serviced apartment tower, four commercial towers, and a retail block.
