Union Bank may cut home, education lending rates next month
A day after SBI reduced rates on education loans, Union Bank of India on Tuesday said it may cut interest rates on home and education loans next month.
New Delhi: A day after SBI reduced rates on education loans, Union Bank of India on Tuesday said it may cut interest rates on home and education loans next month.
"If NIM (net interest margin) continues to hold strong, we may reduce rates especially on the retail sides like home loan and education loan," Union Bank of India Chairman and Managing Director M V Nair said.
At the end of December, the NIM was 3.3 percent, he said, adding, "if the margins are above 3.3 percent in February we will pass the benefit to customers."
The Mumbai-based public sector bank will review rates next month. On Monday, SBI reduced interest rates on education loans by up to 1 percentage point. In December, UBI had reduced base rate or the minimum lending rate by 0.1 percentage points to 10.65 percent.
Nair said the bank's NIM is expected to be around 3.3 percent during the fiscal. On the possibility of RBI's cutting key policy rates in the upcoming mid-quarterly review, Nair said, "the trend is towards reduction." Cash Reserve Ratio (CRR) cut seems to be appropriate tool to infuse liquidity into the system, he said.
In January, RBI policy reduced CRR to 5.5 percent from 6 percent releasing Rs 32,000 crore in the system to ease the liquidity problems.
On overseas expansion, Nair said the bank plans to set up a subsidiary in the UK and a branch in Australia and Belgium. Besides, it plans to open offices in Dubai, Shanghai and Beijing.