Centre Sets WMA Limit At Rs 50,000 Cr For Second Half Of FY24
In a consultative decision between RBI and government of India, it has been determined that the Ways and Means Advances (WMA) limit for the second half of the financial year 2023-24, spanning from October 2023 to March 2024, will stand at Rs 50,000 crore.
The Reserve Bank of India (RBI) holds the authority to initiate a fresh floatation of market loans once the government of India exhausts 75 per cent of the allocated WMA limit. This strategic move allows for the seamless management of financial resources during the specified period.
Furthermore, the RBI, in close consultation with the Indian government, maintains the flexibility to review and potentially revise the limit at any given time, keeping in view the evolving economic circumstances.
In terms of interest rates, the charges for both WMA and Overdraft have been established as follows: WMA will be set at the prevailing Repo Rate, while Overdraft will be subject to a rate two per cent higher than the Repo Rate. This financial framework aims to balance the accessibility of short-term borrowing with prudent financial practices.
This decision underscores the collaborative approach between the Government of India and the RBI in ensuring an effective financial management strategy for the latter half of the fiscal year 2023-24.
It provides a structured framework for borrowing, allowing for a balanced infusion of funds as required by the government.
