Mumbai: India’s Reserve Bank on Monday set Rs 50,000 crore as the ‘Ways and Means Advances’ (WMA) limit for the Central government during the H2FY22.
WMA provides advances to states banking with it. They then use it to tide over temporary mismatches in the cash flow of their receipts and payments.
This is repayable in each case, not later than three months from the date of making the advance.
“RBI decided with the Government of India, that the limit for ‘Ways and Means Advances’ (WMA) for the second half of the financial year 2021-22 (October 2021 to March 2022) be fixed at Rs 50,000 crore.
“The Reserve Bank may trigger fresh floatation of market loans. This can be when the Government of India utilises 75 per cent of the WMA limit.”
The RBI retains the flexibility to revise the limit at any time with the Centre depending on the prevailing circumstances.