Union Bank of India brings down benchmark lending rates by 0.1%

Union Bank of India, a state-run lender, has lowered the benchmark lending rates by 0.1% to 10.65%, a development which signal reversal of the high interest rate regime.

According to Union Bank of India, “Our asset liability committee, in its quarterly review of interest rates, has decided to bring down the base rate by 10 basis points from 10.75% to 10.65% with immediate effect.”

With 13 rates increases effected by the Reserve Bank of India (RBI) in the last 20 months, the banks have been forced to pass on the surging cost of funds to their customers. The rate cut by Union Bank of India has been the first such action by a bank in the current cycle.

This move has come a fortnight after the RBI paused its monetary tightening strategy and also signalled relaxing of policy rates going ahead in the mid-quarter policy review on December 16.