From www.sciencedirect.com: In India, the Central Bank’s requirement for banks to disclose a cost-based benchmark interest rate instead of a prime rate resulted in lower lending costs for firms.

This increased transparency about banks’ costs led to a decrease in interest rates by approximately 1.63 percentage points, enabling firms to increase their total borrowings and investments.

The mechanism driving these changes involved the revelation of relationship rents which fostered greater competition among banks.