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Union Bank raises base rate by 0.5% to 9.5%

New Delhi, 04 February, 2011

Public sector Union Bank of India raised its minimum rate of lending, or the base rate, by 0.5 percent to 9.5 percent, in line with industry peers.

The city-headquartered bank's increase in base rate will be effective tomorrow, a bank statement said here.

The lender's peers, including Dena Bank, Bank of India, Indian Overseas Bank and Indian Bank, had earlier this week upped their base rate following the RBI's January 25 announcement to hike its key rates - the repo, at which it lends and the reverse repo, at which it collects extra cash, by 0.25 percent each.

Union Bank also revised its interest rates on term deposits by up to 1.50 percent on certain maturities. Under the new rate structure, a five-year deposit will fetch a an interest of 9 percent per annum, up from the earlier 7.5 percent, the statement added.

Meanwhile, private sector Kotak Mahindra Bank also increased its interest rates on deposits by up to 0.50 percent depending on maturities in both its baskets - one under Rs 15 lakh and other in the Rs 15 lakh to Rs 1 crore range.

A deposit of under 46-90 days under Rs 15 lakh will earn an interest of 5.5 percent per annum as against the earlier 5 percent, the bank said in a statement here.  

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