RBI Extends the Relaxation in WMA limits and OD regulations

by Psu Connect
Date: 29-09-20

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New Delhi: The Reserve Bank of India extending the interim relaxation in the Ways and means advances (WMA) for the relief in COVID-19, providing the benefits to the state government under COVID-19 measures. With a view to provide greater comfort to State Governments in undertaking COVID-19 containment and mitigation measures, and to enable them to plan their market borrowings, RBI had announced an increase in Ways and means advances (WMA) limit of the States and UTs by 60% over and above the level as on March 31, 2020.

Earlier on April 17, 2020, the central bank had increased the borrowing limit for the same to help them overcome the lockdown-related extraordinary mismatch between revenue and expenditure flows. This extended by another six months to 31 March 2021.

Further, in order to provide flexibility to State Governments to tide over their cash flow mismatches, the overdraft (OD) regulations were relaxed, with effect from April 7, 2020, wherein it was decided to increase the number of days for which a State and UT can be in overdraft continuously to 21 working days from 14 working days and the number of days for which a State and UT can be in overdraft in a quarter to 50 working days from 36 working days.

Both the above relaxations are currently till September 30, 2020.

RBI Extends the Relaxation in WMA limits and OD regulations

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