Union Bank slashes deposit rates by 150 bps

Our Banking Bureau

Mumbai, Aug 10: Union Bank of India has joined the bandwagon of banks reducing interest rates and has decided to slash deposit rates by a maximum of 150 basis points (bps). The new rates will be applicable from August 16.

The bank took the decision at its asset-liability committee (Alco) meeting held on August 6. The bank management reviewed the interest rates in the backdrop of the changing economic scenario. "Poor credit offtake during the current fiscal and declining yield from deployment opportunities prompted the bank to reduce the rates," sources in the bank said. The bank, however, retained the prime lending rate and prime term lending rates at their current levels of 11.75 per cent and 12 per cent. State Bank of India, Bank of India and Bank of Baroda have already announced interest rate cuts.

Union Bank has reduced interest rates by 25 bps for domestic deposits under the Rs 15 lakhs and above category. Deposits between Rs 15 lakhs and Rs 1 crore for 1-2 years maturity will now carry an annual interest of 8.25 per cent, down from the current 8.5 per cent. Two to 3 years deposits will now carry 9 per cent (9.25 per cent) with 3 years and above deposits will carry 9.25 per cent (9.50 per cent).

Likewise, the bank revised rates for the category of Rs 1 crore to 5 crore. The bank has also decided to reduce rates for its high value deposits of Rs 5 crore and above. High value deposits for 1 year to 2 year will carry 8.25 per cent (8.50 per cent). The bank, however, decided to slash rate by 50 basis points for high value deposits under the category of more than two years.