Like many other banks, Union Bank hikes its base rate to 10.25%, with immediate effect. The Reserve Bank of India had tightened the liquidity move, earlier. Now, the Union Bank has increased 25 basis points to 10.25%. Andhra Bank was the first one to increase its base rate, in the public sector lenders. The Union Bank has also increased the rate of interest by .75% of the Non Resident Deposits, in the three to five years maturity. According to the revised interest rate, deposits under one core Rupees, will earn 9.5%, an increase of .5%. For the deposits from one crore to ten crore Rupees, the rate of interest has been increased by .75% and now the modified interest rate is 9.25%.
Earlier, the private sector banks like ICICI, Axis and HDFC have increased their lending rates. The state-run banks have been slow in increasing the base rate, because of the instructions from the Finance Ministry.