RBI fixes Centre's WMA limit for second half of FY21 at Rs 1.25 trn

This is much lower than the quantum earmarked for H1, which was Rs 2 trillion, but way above lasgt years Rs 35,000 cr

The Reserve Bank of India (RBI) has fixed the second half’s Ways and Means Advances (WMA), which is a short-term lending facility to the centre, at Rs 1.25 trillion.  

This is considerably less than the Rs 2 trillion that was earmarked for the government for the first half. However, the second half limit is way above last year's Rs 35,000 crore.  

The WMA for the first half was revised up twice by the central bank in response to the Covid crisis. While fixing the WMA advances, which is done in consultation with the government, the RBI said it may trigger “fresh floatation of market loans when the Government of India utilises 75 per cent of the WMA limit.”  

The central bank can also revise the WMA limit any time.