Your equated monthly installments (EMIs) of retail loans -- home, car, personal loans -- will go up with banks hiking interest rates amid credit growth pick-up and scarce capital.

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The Reserve Bank of India (RBI) on Friday went against the market expectations of a rate hike and refrained from raising interest rates on the money it lends to banks (repo rate, unchanged at 6.5%). From here on, there will be a calibrated tightening of rates -- that is rate cuts are off the table.

Urjit Patel, governor of RBI, said in a post policy press conference, "We have changed our monetary policy stance from neutral to calibrated tightening. From here on, you will see tightening or a status quo. It is not necessary that we raise rates at every policy meet but we will do it in a staggered manner without losing sight of our legislated mandate of keep the inflation soft."

Taking into account the liquidity situation, all the major banks led by State Bank of India (SBI) have already raised rates ahead of policy with all new rates coming into effect by October 1. While SBI raised rates across the board by 0.05% with home loans ranging from 8.70% to 8.85%. This is the fourth hike in this year. In September, the bank hiked interest rates by 0.20%.

ICICI Bank raised rates by 0.10% last week with rates ranging from 8.90% to 9%. Punjab National Bank (PNB) raised rates by 0.20% last week. The country's largest mortgage lender HDFC raised its retail prime lending rate (RPLR) by 0.10% with immediate effect. The new rates vary from 8.80% to 9.05% on various slabs of loans.

Depending on the cost of funds, banks revise their lending rates at the beginning of every month.

The marginal cost based lending rate (MCLR) is the floor price below which banks cannot lend. Most of the banks peg their loans to the one-year MCLR.

RBI has acknowledged the upside risks to inflation and consequently changed the stance to that of calibrated tightening. "This is an indication that the rate hike cycle will be lengthier and the hikes might not necessarily be front loaded," said B Prasanna, group executive and head, global markets group, ICICI Bank.