Union Bank raises PLR to 13.25%

Union Bank of India (UBI) has hiked its benchmark prime lending rate (BPLR) by 75 basis points. The new rate, applicable retrospectively from March 11 this year, will be 13.25% as against the earlier 12.50%, according to a release issued by the bank today.

The bank had last raised its BPLR on February 19 by 50 basis points.

"The bank has decided on this revision taking into consideration the recent hike in CRR and repo rate and its likely impact on cost of funds with resultant pressure on the spread," the bank said in its release.

Though the increase will impact advances with floating interest rate structure linked to BPLR, the bank said that "this increase in BPLR will not apply to the bank's existing housing loans, which have been granted on a floating rate basis."

This increase in BPLR will help the bank improve spreads and the bottomline of the bank, it said.