India Eco Summit: UBI defers plan to cut deposit rates

State-owned Union Bank of India (UBI) today said there is no immediate plan to cut deposit rates even as leading banks like State Bank of India (SBI) and Punjab National Bank have slashed rates by up to 50 basis points.

"Our interest rate is appropriately revised. We don't have any immediate agenda to reduce it (deposit rates)," UBI Chairman and Managing Director M V Nair told reporters on the sidelines of the India Economic Summit.

SBI reduced deposit rates on various maturities by 25-50 basis points, effective from today.

With this, fixed deposits for 1 year to less than 2 years, 2-3 years and 3-5 years will attract interest of 6 per cent (6.25 per cent), 6.5 per cent (6.75 per cent) and 6.5 per cent (7 per cent), respectively.

Asked about revising lending rate, he said, credit offtake is low and there is little scope for revising the rate. However, inflation remains a concern.

Nair said, credit offtake is 16 per cent and the bank expects to end the year with 18 per cent.

Speaking about Net Interest Margin (NIM), he said, "I have given a projection that in this quarter it would go to 2.60 per cent, currently 2.45 per cent and for the whole year it would be between 2.55 to 2.60 per cent.

For the quarter ended September, 2009, UBI reported 38.63 per cent growth in net profit at Rs 505.1 crore.

Total income rose by 20.75 per cent to Rs 3,760.9 crore in the September quarter, against Rs 3,114.53 crore in the corresponding period last fiscal, UBI said in a filing to the Bombay Stock Exchange.