Union Bank of India (UBI) today raised its deposit rates by 25-75 bps across maturities to attract more depositors for bridging the resources-credit growth gap. | |
| M V Nair, chairman, said, "We have to raise funds to keep pace with the growth in advances. There is also a need to give better returns in the light of competition for resource mobilisation." |
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| The bank also has no leeway in using statutory liquidity ratio (SLR) investments to fund credit expansion as its SLR holdings at 25.6 per cent are close to the minimum required 25 per cent. Its excess SLR holdings have fallen to Rs 500 crore from Rs 3,000 crore about six months ago. |
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| The hike is larger for longer term deposits, while it is smaller for short duration deposits. The bank is offering 25 basis points higher for deposits of 91-171 days at 5.25 per cent, 50 basis points more for deposits of 1-3 years at 6.50 per cent and 75 basis points for deposits over five years at 7 per cent. |
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| At present, Centurion Bank of Punjab offers the highest rate of 8 per cent on term deposits with maturity period of five years and above. |
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| Union Bank's total deposits grew by 19.83 per cent to Rs 74,094 crore in 2005-06 from Rs 61,831 crore a year ago. |
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