Union Bank of India raises deposit rates
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Union Bank of India raises deposit rates
Union Bank of India raises deposit rates

Mumbai-State-run Union Bank of India has raised short-term retail deposit rates on select maturities to boost deposit accretion. For maturities of 46-120 days, the rate has been increased by 25 basis points (bps) to 7. 5 per cent, while for 31-45 days, the increase is by 125 bps to six per cent.

The new rates, which came into effect on Monday, will be applicable for deposits of less than Rs 1 crore. While the bank has raised short-term rates, it has reduced the rate for deposits of five to seven years tenure by 25 bps.

The bank is not planning to increase the base rate — the minimum lending rate to which all the interest rates are linked to — in the immediate future. The bank’s base rate is 10.25 per cent. The bank is likely to raise Rs 2,500 crore capitals this financial year to boost its capital adequacy ratio. While the government will infuse Rs 500 crore, which will boost its tier-I capital, the remaining amount will be raised via tier-II bonds.

The overall impact on capital adequacy ratio due to the fund rising will be 100 bps. The bank’s capital adequacy ratio, according to Basel-III requirements, was 9.72 per cent as on September 30. Tier-I capital of the bank was 7.11 per cent.

The bank has crossed total business of Rs 5 lakh crore during the last quarter, a growth of 26.3 per cent, on a year-on-year basis.
Posted On : 12 Nov 13
Union Bank of India raises deposit rates
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