The correct answer is (a), (c) and (d) only. Explanation & Key Takeaways: • Base rate is defined as the minimum interest rate set by the RBI below which Indian banks are not permitted to lend to their customers. • The base rate is calculated by the country’s central regulatory body, the Reserve Bank of India. • The RBI determines the base rate in order to bring uniform rates to all Indian banks, whether they are nationalized banks or they belong to the private sector. • The base rate encompasses all elements of lending rates that are common among borrowers of different categories. • Base rate calculation is done by taking a lot of factors into consideration. These include the cost of deposits, the administrative costs borne by the bank, the profitability of the bank in the previous financial year, and the unallocated overhead costs among other things. • The bank also considers some other factors with stipulated weights while calculating the base rate of the lender. • There are four important components that typically determine the base rate set by a commercial bank. These include • Cost of funds i.e. interest rate provided by the bank on deposits • Operating costs • The minimum rate of returns • Cost of the Cash Reserve Ratio, Hence option 2 is correct.