India's RBI fixes Ways and Means Advances limit for central government at Rs 2.5 lakh crore
Change
India's RBI fixed the Ways and Means Advances (WMA) limit for the central government at Rs 2.5 lakh crore for the first half of financial year 2026-27 (April–September 2026).
Why it matters
The limit caps the central government's access to short-term central-bank advances for intra-year cash shortfalls, restricting reliance on the facility above the stated amount. When WMA utilisation reaches 75% the RBI may trigger fresh market borrowing, forcing the government to shift to market financing before exhausting the cap.
Implications
- • India's Ministry of Finance debt management team must prepare to float additional government market loans as WMA utilisation approaches 75% — failure to prepare will require urgent market funding.
- • India's Ministry of Finance treasury and payment teams must manage intra-year cashflows to avoid overdrafts, because overdrafts carry interest at 2 percentage points above the repo rate.
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