United Bank of India to raise interest rates

Kolkata, Sep 16 (Calcutta Tube) City-based United Bank of India (UBI) has not yet decided to raise interest rates after the Reserve Bank of India hiked the repo rate and reverse repo rate, a top bank official said here Thursday.

The RBI raised the repo rate, by 25 basis points to 6 percent and the reverse repo rate by 50 basis points to 5 percent Thursday.

‘It was expected that the RBI will raise interest rates because of inflation concerns. We have not yet decided on raising deposit and lending rates for our bank which will be done at our ALCO (Asset Liability Committee) meeting,’ Bhaskar Sen, chairman and managing director of the bank, told reporters.

‘I see banks considering raising both deposit and lending rates. Deposit growth rate has been slowing down due to negative real return and so we expect these rates to go up,’ he said on the sidelines of a press meet to sign a pact with Peerless Funds Management Company Ltd.

Sen further said banks would wait till the current quarter (July-September) before raising rates as during this time liquidity remains tight due to factors like corporate tax payments.

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