Jagran Josh Logo
  1. Home
  2.  |  
  3. Economy Current Affairs |  

RBI capped WMA limit for central government at 35000 crore rupees for 2015 first half

Apr 2, 2014 12:12 IST

RBI in consultation with Union Government on 1 April 2014 capped the Ways and Means Advances (WMA) limits for the first half of the new financial year 2014-15 (April 2014-Sep 2014) at 35000 crore rupees.  

This notification of Reserve Bank of India (RBI) is aimed at triggering fresh flotation of market loans when the government utilises 75 percent of the WMA limit. The second half of the limit would be fixed in September 2014.

The interest rate on WMA/overdraft will be based on
    a) WMA: Repo Rate
    b) Overdraft: Two percent above the Repo Rate

Under the notification of the WMA limit, the Reserve Bank had retained the flexibility for revision of the limits at any time in consultation of the government. The flexibility would be used in consideration of the prevailing circumstances.

As per the notification, the government will have to maintain a minimum balance of not less than 100 crore rupees with RBI on Fridays, on the date of closure of government’s financial year and on 30 June i.e. the closure of the annual accounts of the RBI and not less than 10 crore rupees on other days.

Background
The overdrafts beyond 10 consecutive working days will not be allowed on the basis of agreement of 26 March 1997 between the Union Government and RBI. WMA is used by the government to manage its short-term liquidity that arises during the interregnum of its planned market borrowing.

Is this article important for exams ? Yes83 People Agreed
Read more Current Affairs on: RBI , Union Government of India , Ways and Means Advances limit , WMA limit ,

DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

Latest Videos

Register to get FREE updates

    All Fields Mandatory
  • (Ex:9123456789)
  • Please Select Your Interest
  • Please specify

  • ajax-loader
  • A verifcation code has been sent to
    your mobile number

    Please enter the verification code below

Newsletter Signup
Follow us on
This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy. OK