RBI sets government's WMA at Rs 20,000 crore for October-March

MUMBAI: The Reserve Bank has set the ways and means advances ( WMA) limit for the central government at Rs 20,000 crore for the second half of the current fiscal.

"It has been decided, in consultation with the Government of India, that the limit for Ways and Means Advances (WMA) for the second half of the financial year 2015-16 (October 2015 - March 2016) will be Rs 20,000 crore," RBI said in a release.

The interest rate on WMA/overdraft will be 2 per cent above the repo rate, the central bank said.

The minimum balance required to be maintained by the Government with the Reserve Bank will not be less than Rs 100 crore on Fridays, on the date of closure of Government's financial year and on June 30, i.e., closure of the annual accounts of the RBI and not less than Rs 10 crore on other days, it added.

As per the provisions of the agreement dated March 26, 1997 between the Government of India and the Reserve Bank of India, overdrafts beyond ten consecutive working days will not be allowed, RBI further said.

RBI provides WMA to the States banking with it to help them tide over temporary mismatches in cash flow of their receipts and payments.

Such advances, are to be repaid not later than three months from the date of making that advance.