HDFC Bank has increased its Marginal Cost of Funds-based Lending Rate (MCLR) by up to 10 basis points across select loan tenures, with the revised rates taking effect from June 8, 2026. According to the bank's latest update, MCLR rates now range between 8.05 per cent and 8.65 per cent, compared with the earlier range of 8.05 per cent to 8.60 per cent. The revision comes despite the Reserve Bank of India (RBI) keeping the repo rate unchanged at 5.25 per cent for the third consecutive meeting, as reported by Business Standard. The largest increase has been in the two-year MCLR, which has been raised by 10 bps to 8.55 per cent from 8.45 per cent, while the one-year MCLR, widely used as a benchmark for home and other retail loans, has been increased by 5 bps to 8.40 per cent. The overnight MCLR stands at 8.10 per cent, while the 3-month MCLR is 8.20 per cent and the 6-month MCLR is 8.35 per cent. The 3-year MCLR is 8.65 per cent, completing the comprehensive rate structure revision. The MCLR hike decision comes at a time when lending rates have continued to harden despite the RBI holding the policy rate steady over the past three monetary policy reviews.
HDFC Bank, India's largest private sector lender, has informed its agents that effective July 1, 2026, they should stop mobilising fixed deposits and current account, savings account (CASA) funds from government entities. According to reports from The Times of India, the bank sent a mail to its agents making this announcement, citing the expansion of its branch network as the primary driver behind this decision. The bank's spokesperson explained that the business correspondent/business facilitator network was formed with the objective of reaching deep geographies and unpenetrated segments, providing financial and banking services under extant regulatory guidelines and complementing the branch network.
The decision comes close on the heels of the bank paying ₹45 crore incentive to MSRDC for fixed deposit mobilisations, a move that is currently under regulatory scrutiny. As reported by The Times of India, sources indicated that the decision to stop sourcing government funds through DSA and third-party channels was taken much before the MSRDC matter was raised internally, with the bank stating this decision has 'no bearing with any other matter'. The bank observed that a significant portion of business sourcing pertains to the government segment, especially in state capitals, leading to the decision to cease availing services from DSAs and other agents for CASA and FD business of government entities.
According to the bank's communication to agents, HDFC Bank has 9,689 branches across 4,175 cities & towns as of March 31, 2026, significantly expanding its physical presence. The bank's DSA channel was established with a focus on granular retail acquisition and financial inclusion, with commission payouts intended for business where incremental sourcing value is created through agent intervention. In the same mail to agents, HDFC Bank appreciated their work in 'strengthening the portfolio' in the bank's ABC&P (Alternate Banking Channels & Partnerships) channel and 'driving deeper market penetration'.
The impact of the latest MCLR revision will depend on the type of loan and the reset period mentioned in the borrower's agreement. For instance, if a customer has a home loan linked to HDFC Bank's one-year MCLR and the loan is due for its annual reset after June 8, 2026, the applicable interest rate may increase by 5 basis points, subject to the fixed spread over MCLR. A borrower with an outstanding home loan of ₹50 lakh and a remaining tenure of 20 years may experience only a marginal increase in the monthly instalment following a 5 bps rise in the benchmark rate. The bank has left its other benchmark rates unchanged, with the base rate continuing at 8.80 per cent and the benchmark prime lending rate (BPLR) remaining at 17.30 per cent per annum. Now as the implemented higher rates are already in place, borrowers with loans linked to the MCLR-rate such as auto and other personal loans may see their monthly EMIs inch higher or loan tenures rise as and when their interest rate is reset next.
HDFC Bank has retained its existing fixed deposit (FD) interest rates, with general customers earning between 2.75 per cent and 6.50 per cent for deposits below ₹3 crore, while senior citizens can earn between 3.25 per cent and 7.00 per cent. The highest FD rate for general customers is 6.50 per cent for deposits with a tenure of three years and one day to less than four years and seven months. The bank's spokesperson explained that the business correspondent/business facilitator network was formed with the objective of reaching deep geographies and unpenetrated segments, providing financial and banking services under extant regulatory guidelines and complementing the branch network.
