Coronavirus: RBI raises Centre's short term funding support to Rs 2 lakh crore

The Reserve Bank of India Monday raised the Centre's short term funding support to Rs 2 lakh crore for April-September period, sharply up from Rs 75,000 crore in the same period last year in order to help the government fight COVID-19 crisis.

This has been under the short term funding arrangement through ways and means advances (WMA) facility.

The RBI provides WMA facility to centre and states to meet the temporary mismatch in their revenue and expenditure.

The Central bank had last week increased this facility for the states too.

The move will limit the Centre's borrowings from the treasury bills, which had increased in the recent days.

Under the WMA facility, the centre borrows from RBI at a lower rate of interest. The rate of interest is same as the repo rate and the tenure is for three months, with a 21-day over draft facility.

The relief is being given to the Centre to tide over the situation arising out of COVID-19, the RBI said in a statement.