Base Rate

byPaytm Editorial TeamLast Updated: August 19, 2025

Definition

The Base Rate is the minimum interest rate set by the Reserve Bank of India (RBI) that banks must charge on loans.

Purpose

Introduced in 2010, the base rate ensures transparency and prevents banks from charging very high or arbitrary rates.

Benefits

  • Fair loan pricing
  • Protects borrowers
  • Brings uniformity in lending practices

Author

Paytm Editorial Team

The Paytm Editorial Team is a collaborative group of writers, editors, and industry experts. We're dedicated to bringing you the latest insights, news, and guides on digital payments, financial services, and the technology that's shaping India's economy. We offer easy-to-follow guides and insights to help you explore Paytm’s products, features, and services. Our goal is to provide clear, reliable, and helpful information to empower you on your financial journey.

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