Udayavni Special

RBI extends interim WMA limit of Rs 51,560 cr to states till Sep

PTI, Apr 7, 2021, 1:01 PM IST

Source: PTI

Mumbai:  The Reserve Bank of India (RBI) on Wednesday announced an extension of the interim ways and means advances (WMAs) limit of Rs 51,560 crore to state governments till September, to help them tide over the financial stress posed by the second wave of COVID-19.

WMAs are temporary advances given by the RBI to the states to tide over any mismatch in receipts and payments.

There are two types of WMA – normal and special. While normal WMA are clean advances, special WMA are secured advances provided against the pledge of the government of India dated securities.

In addition, RBI has enhanced the aggregate WMA limit of states and Union Territories (UTs) to Rs 47,010 crore per year.

“We have decided to accept the recommendations of an Advisory Committee constituted by the Reserve Bank to review the Ways and Means Advance (WMA) limits for State Governments/UTs and other related issues,” RBI Governor Shaktikanta Das said while announcing the first bi-monthly monetary policy of this fiscal.

Accordingly, it has been decided to enhance the aggregate WMA limit of states and UTs to Rs 47,010 crore, an increase of about 46 percent from the current limit of Rs 32,225 crore which was fixed in February 2016, he said.

Further, he said, “it has also been decided (as per the committee suggestion) to continue the enhanced interim WMA limit of Rs 51,560 crore granted by RBI due to the pandemic for a further period of six months i.e., up to September 30, 2021.”

Acting as the debt manager of the state governments, the RBI’s WMA is intended to provide a cushion to the states to carry on their essential activities and normal financial operations. These increased limits are expected to help state governments spend on fighting the fallout of COVID-19.

As per the RBI rules, normal WMA limits are based on a three-year average of a state’s actual revenue and capital expenditure, and withdrawals beyond the limit are considered an overdraft. States pay interest linked to the repo rate on WMA withdrawals.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Maharashtra: Std 10th exam cancelled, ‘strict lockdown’ likely

Kerala records highest single-day spike of 19,577 covid cases

Haleyangadi: Two kids injured in lightning strikes

Cabinet approves Bangalore Metro Rail Project phases 2A, 2B

All-party meet: Discussions underway, decision on lockdown anytime soon

India to host first ever WBC India Championship on May 1

UGC-NET postponed in view of COVID-19 situation: Union education minister

Related Articles More

Localised lockdowns already hitting economic activities: Report

Need complete trust between industry, govt to sustain growth amid Covid situation: Sitharaman

Rupee rises 23 paise to 74.64 against US dollar in early trade

L&T completes 75 years of construction, mining machinery business

Sensex crashes over 1,300 pts on spiking COVID-19 cases; Nifty below 14,300


A model police station with all Covid-19 precautions set up in Mangaluru

Udayavani 20-April-2021 News Bulletin

Beer truck overturns, people fight like cats and dogs

Chikkamagaluru: Medical shop fraudulently sold 9-yo glucose packets

news bulletin 19- 4 -2021

Latest Additions

Inculcate Lord Ram’s ideals in lives, work towards building a glorious India: Kovind to people

Maharashtra: Std 10th exam cancelled, ‘strict lockdown’ likely

Kerala records highest single-day spike of 19,577 covid cases

Haleyangadi: Two kids injured in lightning strikes

Was Centre behind two suppliers refusing to meet Maha’s Remdesivir demand: Maha Cong

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.