RBI relaxes overdraft facility for states governments
06 May 2021
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Reserve Bank of India (RBI) has extended the number of days that a state government can avail of overdraft facility over a three-month period to 50 days from 36 days at present to enable the state governments to better manage their fiscal situation in terms of their cash-flows and market borrowings.
Accordingly, the number of consecutive days of OD has also been increased to 21 days from 14 days at present.
This facility will be available up to 30 September 2021. RBI has already enhanced the Ways and Means Advance (WMA) limits of states.
RBI said it would ensure that financial conditions remain congenial and markets continue to work efficiently even as the pandemic continues to undermine the strength of the economy. “We are committed to go unconventional and devise new responses as and when the situation demands. We must also stay focused on our future, which appears bright even at this juncture, with India set to emerge as one of the fastest growing economies in the world,” RBI stated.
RBI said it would issue the relevant circulars/notifications relating to all the announcements separately, starting today
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