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In essence, the MCLR (MCLR full form - Marginal Cost of Funds-based Lending Rate) is the lowest interest rate at where a bank can lend to its customers on specific loans. The MCLR is an internal benchmark lending rate used by banks to establish loan interest rates. MCLR Rate Meaning MCLR (Marginal Cost of funds based Lending Rate) is the minimum rate of interest declared by any bank below which the bank cannot offer any kind of loan. It replaces the Base Rate which used to prevail before April 1, 2016. The Base Rate was introduced by RBI in July 1, 2010 to regulate the lending systems by the banks. What is Base Rate? Base rate is the minimum rate set by the Reserve Bank of India (RBI) and below this rate, the banks cannot lend to their customers. RBI ... Learn about MCLR and Base Rate, their differences, calculation methods, impact, deadlines for MCLR disclosure, and how to convert Base Rate to MCLR easily. HDFC Bank has reduced its Marginal Cost of Funds-based Lending Rates (MCLR) by up to 10 basis points (bps) across select loan tenures, a move that could bring relief to borrowers whose loans are linked to this internal benchmark.
