UCO bank will hike deposit and lending rates by 50 bps

State-run UCO Bank sources said in the next few days bank will be increasing both lending and short-term deposit rates by up to 50 basis points.

UCO Bank Chairman and Managing Director S K Goel stated, "Short-term deposit rates for up to six months will go up by 50 basis points." He said the final decision on the rate hike will be taken by next week. The minimum interest rate for six months time slab will hike up to 4 per cent from the existing 3.5 per cent and the maximum fixed deposit rates in the category will be 7 per cent.

He further added there will be slight adjustment in the non-priority sector lending rates as well, these would include housing loan above Rs 30 lakh, corporate loans etc. Adding further he explained that these are the segments where bank has discretion to swindle with the rates as these are not linked to the PLR. He said at present bank has no plans to change PLR.

In addition to this bank is also planning to raise about Rs 825 crore from the market to fund its business growth.

"We are looking to raise Rs 325 crore through perpetual non-convertible preference shares during the second quarter and about Rs 500 crore from follow-on public offer in the third quarter of this fiscal," Goel said.

He explained that the capital raised will help the bank to record 25 per cent loan growth for the next two year.

When ssked about bottom line target for the current fiscal, Goel replied the bank is expecting to earn a profit of Rs 750 crore this fiscal as against Rs 412 crore in the previous year. The profit would increase by 82 per cent over the last fiscal.