Ways and Means Advances to the Government of India for the Financial Year 2010-11

It has been decided in consultation with the Government of India that the following arrangements will be in force for the financial year 2010-11.

The limit for Ways and Means Advances (WMA) will be Rs.30,000 crore for the first half of the year (April to September) and Rs.10,000 crore for the second half of the year (October to March). When 75 per cent of the limit of WMA is utilised by the Government, the Reserve Bank may trigger fresh floatation of market loans.

The Reserve Bank would retain the flexibility to revise the limits at any time, in consultation with the Government of India, taking into consideration the prevailing circumstances.

The interest rate on WMA/overdraft will be as under:

a) Ways and Means Advances:  Repo Rate

b) Overdraft:  Two percent above the Repo Rate

The minimum balance required to be maintained by the Government of India with the Reserve Bank of India will not be less than Rs.100 crore on Fridays, on the date of closure of Government of India’s financial year and on June 30, i.e., closure of the annual accounts of the Reserve Bank of India and not less than Rs.10 crore on other days.

As per the provisions of the Agreement dated March 26, 1997 between the Government of India and the Reserve Bank of India, overdrafts beyond ten consecutive working days will not be allowed.

 J.D.Desai
Assistant Manager

Press Release : 2009-2010/1348