We have already discussed that RBI does NOT  fix the base rate, but it merely issues broad guidelines to banks as to how they should arrive at the base rate.  Thus, individual bank itself fixes its own base rate.      The Base Rate calculations include all those cost elements which can be clearly identified and are common across borrowers. The constituents of the Base Rate  includes

(i) the card interest rate on retail deposit (deposits below Rs. 15 lakh) with one year maturity (adjusted for CASA deposits);

(ii) adjustment for the negative carry in respect of CRR and SLR;

(iii) unallocatable overhead cost for banks which would comprise a minimum set of overhead cost elements; and

(iv) average return on net   

The above illustration is as per the circular issued by RBI in 2010.    This is an indicative illustration and banks needs to fix base rate keeping in view this illustration as a guiding factor.