Bank raises deposit rates, hints at costly loans, UBI goes for all-round hikes **
Taking a cue from the Reserve Bank's monetary policy actions, leading public sector lender Union Bank of India (UNIONBANK.NS<http://in.finance.yahoo.com/q?s=UNIONBANK.NS>: 317.55 +2.15) on Saturday hiked its lending and deposit rates with effect from August 4. Shortly afterwards, ICICI Bank (ICICIBANK.NS<http://in.finance.yahoo.com/q?s=ICICIBANK.NS>: 904.9 -23.8) also announced a hike in its deposit rates while signalling a possible hike in lending rates as well. The country's largest private lender hiked deposit rates across various maturities by up to 75 basis points with immediate effect. "We have increased our deposit rates across various maturities. Though there is an upward bias in rates, we are yet to take call on lending rates. We will keep a watch on the market developments and liquidity to decide on lending rates,'' ICICI Bank MD and CEO Chanda Kochhar said. She, however, added there was a possibility that the lending rates could be also hiked in the future. A decision in this regard would be taken after assessing the overall impact on the bank's cost of funds, she said. UBI raised its deposit rates by up to 100 bps and increased the benchmark lending rate by 50 bps to 12.25%. It, however, left the base rate unchanged at 8%. A UBI senior official said on the condition of anonymity the bank had increased its BPLR in a bid to induce borrowers to shift to to base rate. "We will take a call on the base rate by September end," he added. "Only those borrowers who have recently got their loans sanctioned or are getting them renewed are being linked to the base rate. However 90 % of our customers are still being governed by BPLR system," the official clarified. UBI has increased its domestic deposit rates across different maturities by 25 to 100 basis points. The increase in interest on term deposits for one-year maturities is 25 bps from 6.50% to 6.75%. For short-term deposits of 91 days to less than 6 months, and 6 months to less than 9 months, interest rates have been increased from 3.5% to 4.5% and 4.5% to 5%, respectively. Banking industry sources say a host of lenders, including Bank of India and Axis Bank, are likely to raise their deposit rates by 25-50 bps in the next few days. To fight inflation, the Reserve Bank of India on July 27 hiked its overnight lending rate (repo) by 25 bps to 5.75% and the reverse repo, at which it absorbs deposits, by 50 bps to 4.5%. WPI-based inflation, which stood at 10.6% in June, has been hovering in double digits since February. http://in.biz.yahoo.com/100731/50/baw1lj.html -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
