Comments
The Reserve Bank of India (RBI), in consultation with the Government, has decided that the limits for Ways and Means Advances (WMA) for the first half of the financial year 2021-22 (April 2021 to September 2021) will be ₹1.20 lakh crore.
The central bank provides financial accommodation to the Government to tide over temporary mismatches in the cash flow of its receipts and payments as WMA.
This is intended to provide a cushion to the Government to carry on its essential activities and normal financial operations.
The WMA limit was hiked to ₹2 lakh crore from ₹1.20 lakh crore on April 20, 2020 for the remaining part of the first half of the financial year 2020-21 (April 2020 to September 2020) to tide over the situation arising from the outbreak of the Covid-19 pandemic.
In a statement on Wednesday, RBI said it might trigger fresh floatation of market loans when the Government of India utilises 75 per cent of the WMA limit.
The interest rate on WMA will be the repo rate (currently at 4 per cent). The interest rate on the overdraft will be two per cent above the repo rate.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.