The indications are all there but it will still be a few days before banks start raising lending rates that affect your equated monthly instalments (EMI).

The Reserve Bank of India on Tuesday increased the repo rate, or the rate at which it lends to banks, by 50 basis points to 8.50 per cent along with a 50 basis-point increase in the cash reserve ratio, or the proportion of deposits kept with the central bank, to 8.75 per cent, prompting a near unanimous opinion that interest rates will go up.

Barring a few like HSBC, which increased its deposit rates by up to 75 basis points, the others are trying to get their arithmetic right. The public sector banks (PSB) --  which account for nearly three quarters of the market � are awaiting cues from the finance ministry before raising prime lending rates.

As long as you do not ask a PSB chief about what he is doing, the response is that loans will become costlier by 50 basis points. But ask them about their next move and the likely response is that the asset-liability committee (Alco) is meeting over the next few days.

So, there is a Alco meeting of the Punjab National Bank [Get Quote] on Friday, while Bank of Baroda [Get Quote], Bank of Maharashtra [Get Quote] and Allahabad Bank [Get Quote] will review rates -- both lending and deposit -- next week.

United Bank of India chairman & managing director P K Gupta said the bank will review rates shortly and his counterpart at Punjab & Sind Bank is waiting to see what the others do. Non-banking finance companies, too, favour the wait-and-watch game with Mahindra & Mahindra Financial Services Managing Director Ramesh G Iyer saying the company will decide on revising lending rates after two weeks.

HDFC [Get Quote] will decide its future course of action next week and IndusInd Bank [Get Quote], which has already raised its PLR by 50 basis points, said that it may have to review rates again after a couple of weeks.

Some are moving ahead with hike on sub-PLR loans. Bank of Baroda Chairman & Managing Director M D Mallya said even before it takes a call on revising lending rates, it has begun raising rates on sub-PLR loans by 25-75 basis points. Central Bank of India, too, is adopting a similar strategy.

UCO Bank [Get Quote] chairman and managing director S K Goyel said: "The bank will increase the lending rates for short-term loans of up to six months by 50 basis points to discourage the borrowing habits of those who used the money for speculative purposes."

Just like interest rates, a few bankers said that credit growth will be affected. State Bank of India executives said that if the hikes are temporary and interest rates come down after a few months if the inflation rate cools down, then the bank, India's largest commercially, will not be impacted. Similarly, ICICI Bank [Get Quote] said it is yet to revise its annual targets.