New Delhi: A slew of private banks including ICICI, UTI Bank, HDFC have raised interest rates by up to a percent.

With this hike, rates for borrowers who took a loan in 2004 have gone up by half, from 7 per cent to 11 per cent.

Meet 37-year-old Reshma Syed, she is seriously worried about her finances, what with her bank increasing interest rates. Her EMI, which was calculated at Rs 6,600 last month, when she was short listing her house, has shot up to 7,700, that's over 50 per cent of her salary of Rs 15,000. Reshma says she may not be able to afford so much within her existing salary.

Syed says, "I definitely cannot afford this and I am even thinking of calling off the deal completely."

Reshma is not alone; bankers say their flood of borrowers is fast decreasing.

With rates having raised by four percentage points in the last 18 months, the auto and home loan segments are already seeing a dip as rates are as high as 13.5 per cent.

Ravi Narayanan from ICICI Bank, "Going forward we will have to put our thinking caps and become more innovative and how do we spur the market ahead."

And what's worse, Borrowers like Reshma have to remain careful, while planning their expenses. Since most bankers believe that more rate hikes from the RBI can't be ruled out.