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Union Bank of India on Wednesday announced reduction of interest rates for advances given to medium enterprises ranging from 200 bps to 375 bps to boost their credit growth.
“The revised interest rate for investment grade borrowers is in the range of 12.25% to 13.75%,” the public sector bank said in a statement.
The new rates will be effective November 3, 2014. At present, Union Bank’s base rate is 10.25 per cent.
The bank classifies medium enterprises into two classes: (a) Manufacturing enterprises which are engaged in the manufacture of goods with investment in core plant and machinery over Rs 5 crore and up to Rs 10 crore. (b) Service enterprises which are engaged in rendering services with investment in core equipment more than Rs 2 crore and up to Rs 5 crore.
MSME (Micro, Small & Medium Enterprise) is a dynamic and vibrant sector of the country's economy that nurtures entrepreneurial talent, besides meeting social objectives including that of providing employment to a sizeable number of people across the country, the statement added.
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