Union Bank of India raises BPLR by 25 bps to 14.5%

Public sector lender Union Bank of India on Saturday hiked its benchmark prime lending rate (BPLR) by 25 basis points (bps) to 14.50 per cent.

The move comes a fortnight after the lender increased its base rate, or the minimum rate of lending, by a similar 25 bps to 10.25 per cent.

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BPLR preceded the base rate system that came into effect from July 2010. However, a majority of the older loans continue being under BPLR due to which the rate adjustments are made by banks.

The Reserve Bank of India has raised key rates 10 times since March 2010 in order to tame headline inflation, which stood at 9.44 per cent for June.

A majority of banks, including the nation's top two lenders State Bank of India and ICICI Bank, have raised lending rates since RBI's last policy tightening action on June 16.