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Union Bank of India today joined the over a dozen other banks and hiked its base rate by 50 basis points or 0.50 per cent, following the recent tightening by the Reserve Bank of India to tame inflation which is hovering at 9.44 per cent.
The bank has revised its base rate, the minimum lending rate, by 50 basis points to 10.75 per cent, effective Monday.
However, the bank has only increased the lending rate under the old BPLR scheme by 25 bps to 14.50 per cent.
More than a dozen banks have already hiked their interest rates following the monetary action by the RBI on July 26, and many more are likely to do so in the coming days as the cost of funds has gone up.
However,market leaders SBI, ICICI, HDFC Bank and Axis Bank are yet to revise their rates.
The hike in interest rates comes after the RBI raised its key policy rates last week by a hefty 50 bps to check high inflation.
The short-term lending (repo) rate of the RBI now stands at 8 per cent and the short-term borrowing (reverse repo) rate by a same margin to 7 per cent.
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