Union Bank may raise deposit rates

Date: 22-09-2010

Union Bank of India might consider raising deposit rates next month as an incentive to customers and also as a means to mobilise funds in view of the tightening liquidity in the system.

The shortfall in liquidity in the system was to the tune of Rs 40,000-45,000 crore. The bank aims to achieve 25 per cent growth in credit and 22 per cent growth in deposits during the current fiscal. Net interest income or core income would be the key driver to the profitability of the bank during the second quarter (July-September) of this fiscal. The bank expects to maintain a net interest margin in excess of three per cent by the end of this fiscal.

With a view to boost its fee-based income, the bank would also launch wealth management services, post its mutual fund business takes off in December this year. The Bank intends to maintain a growth of 25-30 per cent moving forward.crack crack