Government has not but availed the Ways and Means Advances facility of RBI on this fiscal
Government has not borrowed a single rupee when it comes to mortgage from Reserve Bank of India (RBI) for the present fiscal 2021-22 as of now, since it has “positive” steadiness in its account.
Known as “Ways and Means Advance” (WMA) as per the RBI Act, the mortgage facility is supplied to the federal government on a short lived foundation by the central financial institution to fulfill its mismatches between expenditure and flows of receipts.
According to sources, the WMA facility has not been availed for the present monetary 12 months, owing to “continuous positive balance in government’s account”, though it has been mounted at Rs 1.70 lakh crore for 2021-22.
RBI gives central authorities with the WMA facility as momentary finance for a interval of 90 days. When the restrict of WMA is exceeded, the overdraft is given for intervals not exceeding 10 consecutive working days.
RBI has the authority to revise the restrict at any time after consultations with the federal government and after contemplating the prevailing circumstances.
What is the rate of interest for WMA and Overdraft?
While the rate of interest for WMA is the prevailing repo charge, which is at present 4 per cent, for overdraft the rate of interest is 2 per cent above the repo charge, i.e. 6 per cent.
Incidentally, authorities had availed the WMA and overdraft facility value Rs 9,55,243 crore for 2018-19, whereas for 2019-20 it had taken Rs 11,79,582 for a similar objective. In 2020-21 the federal government had taken Rs 3,98,990 crore as WMA and overdraft.
