RBI information: RBI fixes WMA restrict for states at Rs 47,010 cr

In view of enchancment within the pandemic scenario, the Reserve Financial institution on Friday determined to scale back the Methods and Means Advances (WMA) for states and Union Territories to Rs 47,010 crore from Rs 51,560 crore. WMA are non permanent advances given by the RBI to the federal government to tide over any mismatch in receipts and funds.

Contemplating the uncertainties associated to COVID-19, the RBI had raised the WMA restrict to Rs 51,560 crore for all states. The upper WMA was relevant until March 31, 2022.

On a evaluate of the bounds and preserving in view the gradual lifting of COVID-19 restrictions, RBI mentioned it has been determined to revert to the WMA limits and timelines for Over Draft (OD) for state governments / UTs as beneficial by the Advisory Committee on Methods and Means Advances to State Governments.

“The WMA restrict for State Governments/UTs will likely be Rs 47,010 crore,” it mentioned.

These norms will likely be efficient from April 1, 2022 and are topic to evaluate.

The RBI additional mentioned the Particular Drawing Facility (SDF) availed by state governments/ UTs shall proceed to be linked to the quantum of their investments in marketable securities issued by the Authorities of India, together with Public sale Treasury Payments (ATBs).

Rate of interest on SDF, WMA and OD shall proceed to be linked to the coverage price of the Reserve Financial institution — the repo price.

Curiosity will likely be charged for all the times the advance stays excellent, the central financial institution added.

The restrict for WMA for the Authorities of India for the primary half of the monetary yr 2022-23 has been set at Rs 1,50,000 crore.

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