Bank Of India Raises ₹10,000 Crore Via Infra Bonds At 7.23%, Union Bank Slashes Retail Loan Rates

New Delhi: Bank of India on Tuesday raised Rs 10,000 crore through the issuance of long-term infrastructure bonds at an interest rate of 7.23 per cent per annum. The fund-raising was carried out through the NSE Electronic Bidding Provider Platform. The base issue size was Rs 5,000 crore, with an additional green shoe option of Rs 5,000 crore. The issue received strong investor interest, with the bank getting 83 bids worth Rs 15,305 crore.

Out of these, 37 bids amounting to Rs 10,000 crore were accepted. The bank said the funds raised through these long-term bonds will be used to finance long-term projects in infrastructure sub-sectors and affordable housing, in line with Reserve Bank of India (RBI) guidelines. However, it clarified that the money is not earmarked for any specific project.

Meanwhile, state-owned Union Bank of India has announced a significant reduction in interest rates on select retail loan products, including home loans, vehicle loans and personal loans. The revised rates came into effect from December 18. Under the revision, home loan interest rates have been reduced by 30 basis points and now start at 7.15 per cent. Vehicle loan rates have been cut by 40 basis points and now begin at 7.50 per cent. Personal loan borrowers have received the biggest relief, with interest rates reduced by up to 160 basis points, bringing the starting rate down to 8.75 per cent.

In addition to the base rate cuts, the bank is also offering an extra concession of 0.10 per cent per annum on eligible green finance home loans and vehicle loans. The rate reduction follows the Reserve Bank of India’s Monetary Policy Committee decision to cut the repo rate by 25 basis points to 5.25 per cent on December 5. This was the fourth repo rate cut in 2025, taking the total reduction in the policy rate to 125 basis points during the year.

Union Bank of India said the move is aimed at supporting homebuyers, vehicle buyers and personal loan customers by lowering borrowing costs, while continuing to follow prudent lending practices. The bank added that it is among the first in the sector to respond to the recent monetary easing, with the objective of improving affordability for retail borrowers, subject to eligibility and credit norms.

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