Banking and monetary regulator, Reserve Bank of India has set up a working group to decide on the idea to keep only one policy rate that is repo rate as indicator towards inflation and monetary control in the economy.

Presently there are three policy rates namely repo, reverse repo and bank rate which control the flow of liquidity in the economy.

The idea of keeping only repo as policy rate is also to make the Indian monetary system inline with international standards.

"The repo rate should be the single policy rate to unambiguously signal the stance of monetary policy to achieve macroeconomic objectives of growth with price stability," the RBI working group said.

The idea proposed says that with changes made in repo, reverse repo and bank rates will change automatically as the three of these are interlinked to one another.

Also, the working committee proposed that rates will move in range of 150 basis points.

Talking about the reactivation of bank rate which has been static since April 2003, the committee said, "The bank rate be activated as a discount rate with a spread over the repo rate. Once the policy rate changes, the bank rate should change automatically with a fixed spread over the repo rate."