Business Standard

Union Bank slashes home loan rates

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Public sector (UBI) on Thursday announced a decline in its interest rate on loans for home and small and medium enterprises (SME) from April.

“Our net interest margin is around 3.3 per cent and we plan to reduce interest rates on some products such as home loans and SME loans so as to pass on the benefit to our customers,” Chairman and Managing Director told Business Standard.

He added there was no immediate plan to reduce base rate until a clear policy signal from the Reserve Bank of India (RBI). “The policy stance regarding easing of interest rates would depend upon four main factors — inflation, oil prices, depreciation of the rupee and government borrowing.”

Nair said while it was near certain that interest rates would not move up, it was difficult to say when it would ease. will hold its next annual policy review on April 17, but the jury is divided on the quantum of easing. Union Bank is trying to bring its gross non performing assets below three per cent by end of March from 3.3 per cent, at present.

“We are also bullish on gold loan segment, which is getting popular in North India also,” Nair added.

The wholesale price index is currently around seven per cent, while food inflation is also heating up. Retail price inflation rose to 8.8 in February from 7.7 in January.

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