Magnetorotational instability (MRI) has been suggested to have an important role on the dynamics of accretion disks. We investigate MRI as an alternative way for guiding plasma from the disk to the funnel flow at the disk-magnetosphere boundary of classical T Tauri stars (CTTSs) by considering the diamagnetic effects. We solve the magnetohydrodynamic equations by including the effect of both the magnetic field gradient and the perpendicular (to the field) velocity gradient produced by the magnetization current at the disk-magnetosphere boundary for the first time. Diamagnetic current modified MRI produces a nonpropagating mode which may lift the plasma from the disk towards the vertical magnetic field lines. Our model also shows that the diamagnetic effects play an important role in triggering the MRI. The instability becomes more powerful with the inclusion of the gradient in the magnetic field and the perpendicular velocity.