The Reserve Bank of India (RBI) has eased the rules for the overdraft facility available to State Governments and Union Territories. This change aims to help them manage their finances more effectively. The maximum number of days for overdraft usage per quarter has been increased from 36 to 50, and the consecutive days limit is now 21, up from 14. These relaxed terms will be in effect until 30th September 2021.
As announced by the Governor in his Statement dated May 5, 2021, RBI has eased the terms governing availment of the overdraft facility extended to State Governments/UTs, to enable them to better manage their fiscal situation in terms of their cash-flows and market borrowings. Accordingly, the maximum number of days in a quarter on which State Governments/UTs can avail overdraft is being increased from 36 days to 50 days. Further, the number of consecutive days on which a State Government/UT can avail overdraft is being increased from 14 days to 21 days. This facility will be available up to September 30, 2021. The Ways and Means Advance (WMA) limits of States/UT have already been enhanced on April 23, 2021.
(Yogesh Dayal)
Chief General Manager
FAQ :
The RBI has eased the terms for the overdraft facility extended to State Governments and Union Territories.
The relaxation is intended to enable State Governments and UTs to better manage their fiscal situation concerning cash-flows and market borrowings.
The maximum number of days a State Government/UT can avail overdraft in a quarter has increased from 36 to 50 days. Additionally, the limit for consecutive days of overdraft has been raised from 14 to 21 days.
This facility will be available up to September 30, 2021.
Yes, the WMA limits for States/UTs were already enhanced on April 23, 2021.