Centre to raise Rs205,000 crore in Ways and Means Advances in FY'12
25 Apr 2011
The government will raise loans of a total Rs215,000 crore by way of Ways and Means Advances (WMA) during the current financial year (1 April 2011 to 31 March 2012), the Reserve Bank of India (RBI) said in a release today.
The RBI, on behalf of the central government, will raise a total of Rs115,000 crore in the first six months of the 2011-12 fiscal, which would include Rs30,000 crore raised by the RBI between 1 and 20 April 2011, Rs45,000 crore to be raised between 21 April and 30 June 2011 and Rs30,000 crore to be raised between 1 July 2011 and 30 September 2011.
The government would raise the remaining Rs10,000 crore between 1 October 2011 and 31 March 2012, the RBI release said.
The central bank said it would trigger fresh floatation of market loans when the Government of India utilises 75 per cent of the WMA limit.
RBI said it has the flexibility to revise the WMA limits at any time, in consultation with the Government of India, taking into consideration the prevailing circumstances.
The interest rate on Ways and Means Advances would equal the repo rate while for overdrafts it would be two per cent above the repo rate.
The Government of India will have to maintain a minimum balance of Rs100 crore with the Reserve Bank of India on Fridays, on the date of closure of the financial year and on 30 June, ie, closure of the annual accounts of the RBI, and not less than Rs10crore on other days.
The Government of India will not be allowed overdrafts beyond ten consecutive working days as per the provisions of the agreement with the Reserve Bank of India.
