RBI fixes WMA limit to government for 2007-08

Mumbai, May 24 (UNI) The Reserve Bank today fixed the ways and means advances (WMA) to the government of India at Rs 20,000 crore for the first half of year and Rs 6000 crore for the second half.

The RBI has been extending WMA with the objective of covering temporary mismatches in the cash flows of their receipts and payments.

The Central bank, in its notification, has said that it would retain the flexibility to revise the limits at any time in consultation with the government.

The interest rate on WMA will come as that of the repo rate while that of the overdraft will be counted two percent above the repo rate, said RBI.

The minimum balance required to be maintained by the government with RBI was fixed at Rs 100 crore on fridays and on the date of closure of government of India's financial year while it has been fixed at not less than Rs 10 crore on other days.

RBI also said that when 75 percent of the WMA limit is utilised by government, it may trigger fresh floatation of market loans.

UNI