The Hindu Business Line : ‘Union Bank PLR unchanged since February’

Kolkata, July 17 Interest rates have not been increased but just restored to the earlier levels, according to Mr M.V. Nair, Chairman and Managing Director, Union Bank of India.

“The general perception that interest rates have gone through the roof is not correct,” he said while addressing the Banking Conclave organised by the Eastern Regional Council of Federation of Indian Chambers of Commerce and Industry.

Explaining his point, Mr Nair said, “The prime lending rate of our bank was 13.25 per cent in April last year and it is the same now. We had revised it downwards by 50 basis points in February 2008, but we recently restored it back.” The prime lending rate was kept unchanged despite the rise in the cash reserve ratio by 250 basis points, rise in inflation rate and upward revision of deposit rates during the period, he observed.

He felt that the gross domestic product growth might decline and inflation might rise, largely due to the skyrocketing of oil prices and developments in the US economy. “This is a global phenomenon and we must learn to adjust to this,” he said.

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