RBI's proposed benchmark base rate versus repo rate.

The RBI has over the past few days put forth several proposals to streamline banking sector's lending norms. One of the most important proposals is with regard to the lending rate. Now each bank in India has its own lending rate called base rate. And most of the lending is at rates above the base rate. However, the RBI has proposed that like in the West, Indian banks too should have a uniform lending rate called Indian Banks Base Rate (IBBR) . This will not only improve transparency in lending but also ensure parity in margins for banks across the sector. Taking the average base rates of leading PSU and private sector banks, the RBI has shown that the benchmark rate can consistently fetch 2-3% margin over the repo rate.