Union Bank ups lending rates by 50 bps

Mumbai, Aug 6: Public sector lender Union Bank of India (UBI) on Aug 6 joined the over a dozen other banks and hiked its base rate by 50 basis points or 0.50 percent, following the recent tightening by the Reserve Bank to tame inflation which is hovering at 9.44 percent.

The bank has revised its base rate, the minimum lending rate, by 50 basis points to 10.75 percent,effective Monday.

However, the bank has only increased the lending rate under the old BPLR scheme by 25 bps to 14.50 percent.

More than a dozen banks have already hiked their interest rates following the monetary action by the RBI on July 26, and many more are likely to do so in the coming days as the cost of funds has gone up.

However, among the leading banks, the market leaders -- SBI, ICICI, HDFC Bank and Axis Bank are yet to revise thier rates.

The hike in interest rates come after the Reserve Bank raised its key policy rates last week by a hefty 50 bps to check high inflation.

The short-term lending (repo) rate of RBI now stands at 8 per cent and the short-term borrowing (reverse repo) rate by a same margin to 7 per cent.

PTI