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UBI cuts base rate

Calcutta, March 18: The United Bank of India (UBI) has trimmed its base rate to 10.25 per cent from 10.50 per cent with effect from March 24.

The bank had hiked the base rate, or the minimum lending rate, to 10.50 per cent from 10.25 per cent last month.

According to bank sources, the hike in base rate in February was expected to generate additional interest income, which would help the bank improve its net interest income and operating profit in the fourth quarter. The reduction in the base rate will help the UBI to increase its lending to the retail segment.

In the third quarter ended December, the UBI had suffered a net loss of Rs 1,238.08 crore, while gross non performing assets stood at Rs 8,545.5 crore. A difference of opinion over NPAs saw chairman Archana Bhargava quitting the bank in February.

The finance ministry has conducted an inquiry to identify the cause of UBI’s poor performance. The RBI has asked the bank not to lend more than Rs 10 crore to a single borrower.

 
 
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