A recent press report said that Public sector lender United Bank of India has hiked its lending rate by 25 basis points (bps), which has made auto loan, home loan and corporate loans more expensive. Reports said that the Bank has increased its Base Rate and Prime Lending Rate by 25 bps to 10.25 per cent and 14.50 per cent respectively.
Reports said that the hike in its interest rate hikes is mainly due to the interest rate hike by the Reserve Bank of India in its mid-quarterly review of credit policy 2011-12. The RBI had hiked its key short-term lending and borrowing rates by 25 basis points (0.25 per cent) each with immediate effect on June 16 in order to control inflation and as a result the short-term lending (repo) rate now stands at 7.5 per cent and the borrowing (reverse repo) rate at 6.5 per cent.
Reports said that after the decisions of the Reserve Bank of India, most of the banks have hiked interest rates. Earlier the bank has opened a retail loan processing centre in Kolkata, and has planned to add 25 such centres across the country this year. The bank’s total loan book currently includes 15 % retail advances and the bank expects 30 per cent growth on the retail side