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Banking & NBFCs · Daily brief

HDFC Bank cuts rates. Bank of Baroda raises them.

Two large banks moved MCLR in opposite directions inside a week. Whether an EMI actually changes depends on which benchmark the loan is linked to.

FINSAMUDRA DESK · 11 Aug 2026, 8:15 am IST · 1 MIN

HDFC Bank cuts rates. Bank of Baroda raises them.
Image: Finsamudra LinkedIn archive

HDFC Bank cuts rates. Bank of Baroda raises them.

So… are lending rates actually falling?

Not that simple.

HDFC Bank has cut its MCLR by 5 bps across most tenures, effective August 7.

At the same time, Bank of Baroda has increased its 3-month MCLR by 10 bps, effective August 12.

Two major banks.

Two opposite decisions.

And here’s the part borrowers often miss:

A lower MCLR doesn’t automatically mean your EMI will fall.

The impact depends on whether your loan is MCLR-linked, your applicable spread, and your reset date.

Many newer floating-rate retail loans are linked to external benchmarks instead.

So the bigger BFSI story isn’t simply:

“Rates are going down.”

It’s that banks are managing their funding costs, lending rates and margins differently even within the same interest-rate environment.

For borrowers, the better question isn’t:

“Did my bank cut its rate?”

It’s:

“What benchmark is my loan actually linked to?”

That distinction can matter more than a 5-bps headline.

How many borrowers actually know what benchmark their floating-rate loan is linked to?

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