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Union
Bank home loan rates rise 0.5%
Mumbai: The Union Bank of India said it would raise
home loan rates by 50 basis points across the board from
January 1, 2004. Thus, fixed rate loans for 5-10 years
will cost 9 per cent and those for over 10 years 9.25
per cent. Floating rate loans will, however, cost 25 basis
points less than fixed rate loans of the same tenor. Floating
loans will henceforth be linked to the bank's benchmark
prime lending rate.
Union
Bank Chairman and Managing Director V Leeladhar said home
loan interest rates had bottomed out and there was no
scope for further reduction. The bank has also slashed
rates on loans to the agriculture and small-scale sectors,
depending on the advance. There was a feeling that agriculture,
small-scale industries and other priority sectors were
being deprived of the benefits of falling interest rates,
Leeladhar pointed out.
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Principal
Financial to foray into pensions
Chennai:
The
Principal Financial group, one of the largest retirement
fund managers in the US, is readying to foray into pension
fund management in India. They are awaiting the guidelines
for private Pension Fund Managers being formulated by
the newly constituted Pension Fund Regulatory and Development
Authority (PFRDA). Come January 2004, employees entering
Central Government service will be moving over to a contributory
pension system, managed by private pension fund managers.
Presently, pension liabilities for Government employees
are managed and funded by the Central Government.
Confirming
this development, Sanjay Sachdev, CEO and Managing Director,
Principal AMC Private Ltd, said: "The Principal,
along with its partners Punjab National Bank and Vijaya
Bank are well-positioned to enter the pension business.
We are monitoring the developments in the pension sector
very closely, and have been sharing our global experience
with the Government. We have already done a substantial
amount of legwork on market assessment and product development,
and plan to apply for a licence once the new guidelines
are announced."
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