Union Bank raises base rate by 0.5% to 9.5%

Mumbai, Feb 3 (PTI) Public sector Union Bank of Indiatoday raised its minimum rate of lending, or the base rate, by0.5 per cent to 9.5 per cent, in line with industry peers.

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

The lender''s peers, including Dena Bank, Bank ofIndia, Indian Overseas Bank and Indian Bank, had earlier thisweek upped their base rate following the RBI''s January 25announcement to hike its key rates - the repo, at which itlends and the reverse repo, at which it collects extra cash,by 0.25 per cent each.

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

Meanwhile, private sector Kotak Mahindra Bank alsoincreased its interest rates on deposits by up to 0.50 percent depending on maturities in both its baskets - one underRs 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 willearn an interest of 5.5 per cent per annum as against theearlier 5 per cent, the bank said in a statement here.