Country’s second biggest private sector lender HDFC Bank on Wednesday cut its benchmark lending rate by up to 0.90 per cent, joining over a dozen banks and housing finance companies that have slashed rates in last few days. The bank’s asset liability committee decided for a cut of 0.75-0.90 per cent in marginal cost of funds-based lending rate (MClR) across multiple tenures.
When contacted, its executive director Kaizad Bharucha confirmed the move and said this has primarily been driven by the huge amount of liquidity in the system due to demonetisation. “The rates have been calculated based on liquidity position and all benefits have been passed on to borrowers. The new rates are effective January 7,” he told PTI.
Even though IDBI Bank and State Bank of Travancore had announced cuts in the last week of 2016, the lending rate lowering by banks got-off with country's largest lender SBI slashing its offerings by a flat 0.90 per cent on Sunday, a day after being exhorted by Prime Minister Narendra Modi to help the poor and marginalised sections.