RBI sets WMA limit at Rs 20,000 cr for H1 FY'09
The Reserve Bank on Friday said it has fixed the limit for ways and means advances (WMA) at Rs 20,000 crore from April to September and at Rs 6,000 crore for the second half of FY'09.
By PTI |
MUMBAI: The Reserve Bank on Friday said it has fixed the limit for ways and means advances (WMA) at Rs 20,000 crore from April to September and at Rs 6,000 crore for the second half of FY'09.
The RBI said the interest rate of WMA will be the repo rate, which stands at 7.75 per cent, while for overdraft the rate would be two per cent above the repo rate.
Ways and means advances relate to the rate of interest and the minimum balance required by the government to be maintained with the RBI.
RBI said it may trigger fresh flotation of market loans when 75 per cent of the WMA limit is utilised by the government.
The central bank also said it would retain the flexibility of revising the limits of WMA at anytime, taking into consideration "the prevailing circumstances" and in consultation with the government.
The RBI said the interest rate of WMA will be the repo rate, which stands at 7.75 per cent, while for overdraft the rate would be two per cent above the repo rate.
Ways and means advances relate to the rate of interest and the minimum balance required by the government to be maintained with the RBI.
RBI said it may trigger fresh flotation of market loans when 75 per cent of the WMA limit is utilised by the government.
The central bank also said it would retain the flexibility of revising the limits of WMA at anytime, taking into consideration "the prevailing circumstances" and in consultation with the government.
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