UBI today launches 'Union Cash Certificate'
Bangalore, Sept 1: To further augment resources in the medium term, public sector Union Bank of India (UBI) today launched 'Union Cash Certificate', which offered depositors the triple advantages of high returns, liquidity and safety.
UBI expected to net Rs 3,500 crore from the scheme, to be open till October 31. If the subscription surpassed the target, the bank would absorb it. The deep discount bonds, carrying terms of three, four and five years, would yield an interest of eight per cent per annum. The annualised yield would be higher at 8.4 per cent, 9.32 per cent and 9.72 per cent for the three terms respectively. Senior citizens would be offered an extra 0.50 per cent interest on their deposits.
Briefing reporters here, UBI Chairman and Managing Director M V Nair said the scheme would be issued in varying amounts, ranging from Rs 5,000 to Rs ten lakh. The scheme was better compared to National Savings Certificates or Public Provident Fund as it offered high liquidity, he claimed.
The issue price of the cash certificate would be the discounted value of the maturity proceeds with quarterly compounding of interest at the applicable rate. Premature withdrawal of the deposit would be permitted as per the existing policy. Loan or overdraft facility up to 90 per cent of the deposit amount with accrued interest would also be available to the depositors, he said.
''This scheme is ideal for planning children's education, marriage in the family, for secured retired life or to meet any contingency in the family. Through this festive offer, we are targetting mainly individuals and it will be sold through our 2,200 outlets,'' he added.