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RBI Raises Ways and Means Advances (WMA) Limit for States

Published on April 19, 2020
Current Context: The Reserve Bank of India (RBI) has increased WMA for state government by another 30%.
RBI Raises Ways and Means Advances (WMA) Limit for States
  • Initially, on 1st April 2020, RBI had raised the WMA limit by 30%, but the central bank has now made an new announcement to increase the WMA by another 30%.
  • This action by RBI will help state governments as will not have to bunch up auctioning of bonds.
  • The raised WMA limit has created a space for Rs 12,000 crore for the state governments looking to raise money.
  • Static Part: What is WMA? It is a tool under credit policy of RBI for the states which help them tide over temporary mismatches in the cash flow of their receipts and payments.it is mentioned in the Section 17(5) of the RBI Act, 1934.

Static Part:

  • Headquarters of RBI– Mumbai, Maharashtra
  • Governor of RBI – Shaktikanta Das
  • Deputy Governors of RBI– Bibhu Prasad Kanungo, Mahesh Kumar Jain, Michael Debabrata Patra.

Question:

Q.1 By how much percent RBI has increased WMA recently?
a. 20%
b. 25%
c. 30%
d. 35%
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