The Reserve Bank of India vide its notification dated 29th September 2020 has extended interim relaxation in Ways and Means Advances (WMA) limits and OD regulations with a view to provide greater comfort to state governments in undertaking COVID-19 containment and mitigation measures, and to enable them to plan their market borrowings.
RBI had announced an increase in WMA limit of the States/UTs by 60% over and above the level as on March 31, 2020, Further, in order to provide flexibility to State Governments to tide over their cash flow mismatches, the overdraft (OD) regulations were relaxed, with effect from April 7, 2020 wherein it was decided to increase the number of days for which a State/ UT can be in overdraft continuously to 21 working days from 14 working days; and the number of days for which a State/ UT can be in overdraft in a quarter to 50 working days from 36 working days.
Further, the above relaxations were currently available till September 30, 2020, however, through this notification, it has been extended till 31st March 2020.
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