HDFC Bank, PNB, and Canara Bank update their lending rates for December 2024, with the latest MCLR in effect.

The Marginal Cost of Lending Rate (MCLR) is the minimum rate at which banks lend to borrowers, based on their own cost of funds. The MCLR is closely tied to the Reserve Bank of India’s (RBI) repo rate, which is the rate at which the central bank lends to commercial banks. When the repo rate rises, it increases the cost of borrowing for banks, which in turn leads to an increase in the MCLR. This makes loans more expensive for consumers. Therefore, an increase in the repo rate can lead to a rise in the MCLR, making it more costly for individuals and businesses to borrow money. This has significant implications for the economy, as it can impact borrowing, spending, and overall economic growth.