Bank of India

Bank of India

Bank of India: Three more lenders-Union Bank of India, Central Bank and Corporation Bank--have reduced their lending rate following Reserve Bank of India's signal for cheaper funds. However,money continues to remain scarce with liquidity drying up partially due to intervention by the central bank in the foreign exchange market.

On Monday, the rupee fell to near-53 levels but recovered from the day's lows to close at 52.70. Dealers expect that the central bank will step in to defend the local unit if it weakens close to 53 levels again. RBI is believed to have spent over $20 billion in defending the domestic currency in 2011-12 , a move which has drained the system of over Rs 1 lakh crore of liquidity. On Monday banks borrowed Rs 1,11,190 crore from RBI through a repo facility.


On Monday Union Bank of India said that it has reduced deposit rates across various maturities . While in the longer end, it has been brought down by 25 to 45 basis points, at the short end, it has been realigned upwards by 15 to 25 basis points. The change in the deposit rates will come in force from April 27, 2012. The bank has also reduced its base rate from 10.65% to 10.50% with effect from 1st May 2012.
Mumbai-based Central Bank reduced its base rate by 25 basis points from 10.75% to 10.50%. The bank has also brought down interest spread over the base rate for loans to the extent of 2 percentage points. The bank has also reduced rates on term deposits which now range between 5% and 9.10%. Mangalore-based Corporation Bank has revised its base rate from 10.65% to 10.50% with effect from May 01, 2012.

Bank of India