State Bank of India, the country`s top lender by assets, on Thursday raised marginal cost-based lending rates (MCLR) across most maturities, effective immediately.

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SBI, which accounts for more than a fifth of India`s banking assets, raised the key 1-year MCLR to 8.15 percent from 7.95 percent, according to a notification on Thursday. 

It is the first hike in the 1-year MCLR since the inception of a new lending rate system in April 2016, according to Thomson Reuters data.

Banks are raising interest rates even though the central bank is leaving its rates unchanged, as risks such as surging bond yields and more provisioning requirements erode their profit.

On Wednesday, SBI raised interest rates on domestic bulk term deposits across most maturities.