Union Bank raises lending rate by 0.5% to 13.25%

Public sector lender Union Bank of India today increased its benchmark prime lending rate (BPLR) by 0.50 per cent to 13.25 per cent on the back of hardening of interest rates across the economy.

"In view of the current micro-economic scenario and hardening of interest rates, UBI has decided to revise its BPLR by 50 basis points with effect from December 20," the bank said in a statement to the Bombay Stock Exchange.

The rate increase will apply to old borrowers who have not migrated to the new base rate system, which was introduced from July 1 this year to make lending rates more transparent.

Apart from the increase in rates on the lending side, the Mumbai-based bank also hiked its term deposit rates by up to 100 basis points, it said in the statement.

It has launched a special 700 days product carrying an interest rate of 8.60 per cent, while the interest rate on a one year deposit has been raised to 8 per cent from 7.25 per cent earlier, it added.