The country's largest lender, State Bank of India, has increased its marginal cost of funds-based lending rate by 10 basis points or 0.1 percent across all tenures, raising borrowers' EMIs. This is the second price rise in a month, bringing the total cost up by 0.2 percent.

The modification comes after the Reserve Bank raised rates off-cycle earlier this month. The repo rate, which the central bank uses to lend short-term money to banks, was raised by 0.40 percent to 4.40 percent. SBI's lending rate cut is likely to be followed by other banks in the coming days.

EMIs will rise for borrowers who have taken out loans based on the MCLR (Marginal Cost of Funds based Lending Rate), but not for those who have taken out loans based on other benchmarks.

The External Benchmark Based Lending Rate (EBLR) of SBI is 6.65 percent, while the Repo-Linked Lending Rate (RLLR) is 6.25 percent as of April 1.  When granting any type of loan, including house and vehicle loans, banks add Credit Risk Premium (CRP) over the EBLR and RLLR.

According to the information on the SBI website, the increased MCLR rate goes into effect on May 15.

Bajaj Finance raises interest rate on fixed deposit Ac with immediate effect.

HDFC raises home loan interest rates by 0.30 pc

PNB raises term deposit interest rates by 60 basis points