Union Bank cuts lending, deposit rates by up to 0.50%

It slashed its base rate or the minimum lending rate by 0.25% to 10%

Close on the heels of RBI announcing the rate cut, Union Bank of India (UBI) today cut lending and deposit rates by up to 50 basis points or 0.50%.

UBI is the second state-owned bank to announce rate cut after the Kolkata-based United Bank of India.

The UBI will reduce the benchmark base rate from 10.25% to 10.00% with effect from January 27, 2015, the bank said in a filing to the BSE.

It also announced cut in deposits rates for different buckets under retail and bulk deposits from 0.10% to 0.50%.

Earlier, the United Bank of India slashed its base rate or the minimum lending rate by 0.25% to 10%.

Many other banks may also follow suit in the days to come.

With the reduction in the base rate, all kinds of loans including housing and auto loan are expected to become cheaper.

These announcements came within hours of RBI reducing the benchmark interest rate by 0.25% to 7.75% with a view to boost growth.

The rate cut by RBI came after a gap of over 20 months. The RBI had last reduced repo rate by 0.25% in its May 3, 2013 policy review.