Mumbai, April 17 (MExN): The Reserve Bank of India (RBI), on April 17, has increased the amount of loans the States and Union Territories (UTs) can borrow from the central bank for undertaking their COVID-19 containment and mitigation efforts.
“Ways and Means Advances (WMAs) Limit of states and union territories has been increased by 60% over and above the limit as on March 31, 2020,” the RBI said while announcing a set of new measures to mitigate the impact of economic fallout on financial liquidity due to COVID-19 pandemic.
The March 31 order suggested for increasing the WMA limit by 30 percent from the existing limit for all States/UTs.
However, the latest announcement increased it to 60% and will be available till September 30, 2020.
The increase in WMA would provide greater “comfort to states for undertaking COVID-19 containment and mitigation efforts, and also to help them plan their market borrowing programmes better,” RBI said in a statement.
WMAs are temporary loan facilities provided by RBI to help governments tide over temporary mismatches in receipts and expenditure.
This may come as a relief for fund crunch state like Nagaland. According to RBI’s monthly Bulletin regarding ‘Financial Accommodation Availed by State Governments under various Facilities,’ during the period from November 2019-January 2020, the state availed a sum of Rs 105 crore for 10 days under the WMA facilities.
