Mumbai, April 7: The Reserve Bank has fixed a limit of Rs 16,000 crore as the ways and means advances (WMA) to the Centre for the current fiscal. The limit will be Rs 10,000 crore for the first half (April to September) and Rs 6,000 crore for the second half (October to March). Depending on market conditions, the central bank can go raise fresh loans once the government has used 75 per cent of the limit. The interest rate on WMA will be the bank rate; it will be 2 per cent more on overdrafts.
The RBI said that the government has to maintain a minimum balance of Rs 100 crore on the following days — Fridays, on the date of closure of the Centre’s financial year and on June 30, the day RBI closes its accounts.