Reserve Bank of India has set a ₹50,000 crore limit on Ways and Means Advances

¨     Reserve Bank of India has set a ₹50,000 crore limit on Ways and Means Advances (WMA).

¨     This limit applies to the central government for the second half of the 2025-26 financial year.

¨     WMA is a short-term loan facility provided by the RBI.

¨     It helps the central, state governments, and Union Territories manage temporary cash shortfalls.

¨     The limit was fixed after discussions between the RBI and the central government.

¨     The RBI may begin fresh market borrowings once 75% of the WMA limit is used.

¨     Both the RBI and the government can revise the limit if needed.

¨     This decision can be based on changing economic or fiscal conditions.

¨     The interest rate on WMA will match the current repo rate.

¨     If the government exceeds the WMA limit, the overdraft rate will be 2% higher than the repo rate.