Explanation:

Only codes 1,2&4 are correct.

• 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. 

• Note: The base rate is the minimum interest rate the bank charges from its customers while lending a loan. The banks are permitted to charge above the base rate. It is fixed by an individual bank, hence it varies from bank to bank.

• Caveat: RBI decide minimum benchmark rate that below this no bank should lend to their customers.

• It is used in place of the Benchmark Prime Lending Rate (BPLR). It was introduced to enhance transparency that was lacking in the BPLR.

• As per the RBI guidelines, banks cannot lend money below the determined base rate. The banks are required to declare their base rates on their website to make lending more transparent.

• The base rate is calculated only after taking all the risk factors into consideration.

• Banks should revise the base rate at least once every quarter or more than once a quarter as per their convenience.

• 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.

Hence option 2nd is correct.