The Hindu : Business : United Bank chases post office rates

Online edition of India's National Newspaper
Tuesday, Feb 08, 2005

Business

Business

United Bank chases post office rates

By Indrani Dutta

KOLKATA, FEB. 7. United Bank of India today announced a 7 per cent interest rate on term deposits for seven to ten year maturity, creating a new `bucket' and also chasing the post office deposit rates in its offering to senior citizens, which had been pegged at 8 per cent.

While some small private sector banks do offer a 7 per cent rate, United Bank became the first public sector bank to do so, signalling thereby a possible hardening of rates, industry experts told The Hindu.

It may be mentioned here that a northward movement in bank deposit rates was predicted by pundits in the wake of the higher Employees' Provident Fund rates announced last week. The United Bank's announcement is being seen as harbinger of sorts.

The bank is now planning to expand its presence in Tamil Nadu and Kerala, besides Itanagar, Dharam shala, Pathankot, Hardwar and New Delhi.

The rates announced by bank are effective from today. The bank offers a single rate of 6 per cent for deposits held between one and less than five years. For the five to less than seven years slab, the rate has been kept at 6.5 per cent.

Across the slabs, an additional one per cent is offered to senior citizens according to an official spokesman of the bank.

Premature withdrawal of term deposits is allowed and no penalty is charged to customers, the release said. A spokesman clarified that this was subject to a ceiling of Rs. 1 lakh and did not hold good for customers who wanted to migrate from a low paying scheme to a higher one, in the event of a jacking up of rates.

Seen until recently as one of the loss-making banks from the east, United Bank made a turnaround in 1998-99, which has been sustained since then sources said. Although it is still carrying a loss of Rs. 578 crores, the bank has taken efforts to address this issue. The prospect for the fiscal year was good, according to sources. The bank is raising Tier-II capital through a Rs. 300-crore private placement of bonds.

Printer friendly page
Send this article to Friends by E-Mail

Business

News Update

Stories in this Section