RBI reduces ways and means advances limit

By Our Special Correspondent

MUMBAI, APRIL 1. The Reserve Bank of India has reduced the limit of ways and means advances (WMA) by Rs. 1,000 crores to Rs. 10,000 crores for the first half of the year 2001-2002 and Rs. 6,000 crores for the second half of the year. The change will be applicable with effect from April 1, 2001.

Ways and means advances relate to the rate of interest and the minimum balance required by the Government to be maintained with the RBI. When 75 per cent of the WMA is utilised by the Government, the RBI may trigger fresh flotation of market loans depending on market conditions.

The interest rate on WMA will be at bank rate, seven per cent and the overdraft at bank rate plus two percentage points at nine per cent.

The minimum balance required to be maintained by the Government with the RBI is not less than Rs. 100 crores on Fridays, as at the close of Governments' financial year and June 30 and not less than Rs. 10 crores on other days.

Overdrafts beyond ten consecutive working days will not be allowed.

No outstanding against loans and advances

By Our Corporate Reporter

CHENNAI, APRIL 1. The outstanding amount under loans and advances of the Central Government from RBI was nil during the week ended March 23 against Rs. 5,688 crores in the previous week.

Loans and advances of State governments fell by Rs. 4,151 crores to Rs. 3,268 crores and those of scheduled commercial banks by Rs. 2,642 crores to Rs. 3,896 crores during the period under reference.

Reserve money contracted by Rs.14,314 crores with the outstanding amount at Rs. 2,85,690 crores in the week ended March 23.

Net RBI credit to Government declined by Rs. 7,.877 crores to Rs. 1,44,616 crores with net credit to Centre by Rs. 3,726 crores to Rs. 1,41,389 crores during the period.

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