On 22nd March 2012, Union Bank of India, has reduced its rates on home loans as well as loans for Small and Medium Enterprises (SME). This will be effective in April.
The Chairman and Managing Director M V Nair claimed that the Net Interest Margin is 3.3 percent and the bank is pondering over to decrease the rates on home loans as well as SME loans in order to give benefit to the customers.
The Bank will keep the Base Rate stable for now as there has been no positive signal from the Reserve Bank of India.
The ease in interest rate depends on inflation, oil prices, depreciation of the rupee and government borrowing.
There will be next annual policy review of RBI on 17th April 2012. The Union Bank of India wants its Gross Non Performing Assets below 3 percent from 3.3 percent by the end of March .
The Union Bank of India will work on Gold Loan segment also as it is very much in demand in Northern India. The Whole sale price index inflation is around 7 percent where as the food inflation is also increasing. The Retail price inflation is 8.8 in February which was 7.7 in January.