Public sector lender, Union Bank of India has raised its base rate by 50 basis points to 8.5%. Deposit rates of the bank have also been raised by 25 bps in different maturities.

''In view of the recent macroeconomic scenario, hardening interest rates and RBI's policy stance, the bank has decided to revise its base rates and and also interest on retail term deposits,'' the bank said.

Deposits having maturity of 1 to 3 years will now fetch 7.25% interest which is a 25 bps rise. Deposits having maturity of more than 3 years will now fetch 7.50%.

Many banks like Punjab National Bank, Allahabad Bank, Indian Bank, Indian Overseas Bank and IDBI have increased their lending rates following the policy rate hike by monetary policy.