RBI fixes Ways and Means Advances (WMA) limit at ₹50,000 crore for the second half of FY 2026-27. Market loans may be triggered at 75% utilization.
WMA Limit Set at ₹50,000 Crore for Oct 2026–Mar 2027
The Reserve Bank of India, in consultation with the Government of India, has set the Ways and Means Advances (WMA) limit at ₹50,000 crore for the period from October 2026 to March 2027. The WMA mechanism provides temporary overdraft facilities to the central government to manage mismatches in receipts and expenditures.
As per standard protocol, the RBI may trigger the fresh floatation of market loans when the government utilizes 75% of the WMA limit. The central bank retains the flexibility to revise the WMA limit during the period based on fiscal developments and liquidity conditions.
This announcement is significant for public finance and banking practitioners. WMA levels reflect the government’s expected cash flow volatility and borrowing program. High WMA utilization often precedes increased market borrowing, impacting bond yields and liquidity. Legal advisors should also note that WMA terms are governed by the agreement between the Government of India and the RBI under Section 17(5) of the RBI Act, 1934.
Citations
- RBI Act, 1934, Section 17(5)