The Reserve Bank has set the 'ways and means advances' (WMA) limit at Rs 700 bn for the central government for the July-September quarter, up from Rs 600 bn in the previous quarter.
'WMA' are temporary advances given by the RBI to government to tide over any mismatch in receipts and payments.
"It has been decided, in consultation with the Government of India, that the limits for Ways and Means Advances (WMA) for the second quarter of the financial year 2018-19 (July 2018 to September 2018) will be Rs 700 bn," the RBI said in a statement.
It further said that the central bank may trigger fresh floatation of market loans when the government utilises 75 per cent of the WMA limit.
The RBI retains the flexibility to revise the limit at any time, in consultation with the government, taking into consideration the prevailing circumstances.