Skip to main content

What is Ways and Means Advances (WMA)? (Updated as on January 09, 2026)

Reserve Bank of India (RBI) has recently announced the Ways and Means Advances (WMA) limit for the Government of India. So, what is WMA?

What is Ways and Means Advances (WMA)?

Ways and Means Advances (WMA) is a collateral free clean advance availed by the Central and State Governments from RBI, to tide over temporary mismatches in the receipts and payments.

Section 17(5) of the Reserve Bank of India Act, 1934 empowers RBI to grant WMA to Central and State Governments, as and when required by them.

What is Special WMA / Special Drawing Facility (SDF)?

In addition to WMA, State Governments are also eligible for a Special Drawing Facility (SDF), which is granted against collateral of Government Securities held by the State Governments. 

SDF availed by State Governments / UTs is linked to the quantum of their investments in marketable securities issued by the Government of India, including Auction Treasury Bills (ATBs). 

(Updated on June 28, 2024)

Based on the recommendations made by the Working Group constituted by RBI on Consolidated Sinking Fund (CSF) and Guarantee Redemption Fund (GRF), the maximum limit of SDF that can be availed by the States / UTs against the investments held under CSF/ GRF shall be 50% of the lower of –

  • Outstanding balance of the funds as on the last date of the 2nd preceding quarter.
  • The current balance held in CSF/ GRF. 

For investments held in ATBs, the maximum limit of SDF shall be 50% of the lower of –

  • Outstanding balance in ATBs (91 / 182 / 364 days) as on the last date of the 2nd preceding quarter.
  • The current ATB balance.

State Governments have to exhaust the SDF limit before availing WMA.

What is Overdraft (OD)?

If the Central Government borrows over and above the WMA limit, it amounts to Overdraft (OD). 

When the advances to the State Governments exceed their SDF and WMA limits, overdraft (OD) facility is triggered.

How long can State Governments be in Overdraft?

State Governments / UTs can avail OD on 14 consecutive days and can be in OD for a maximum number of 36 days in a quarter.

If the OD exceeds 100% of the WMA limit for five consecutive working days for the first time in a financial year, RBI will advise the State to bring down the OD level within the 100% of WMA limit. If such irregularity occurs on a second / subsequent occasion in the financial year, RBI will stop payments.

What are the limits for WMA?

(Updated on September 26, 2025)

The WMA limit for Central Government for the second half of the financial year 2025-26 (October 2025 to March 2026) will be ₹50,000 crore. RBI may trigger fresh floatation of market loans when the Government of India utilises 75% of the WMA limit. 

(Updated on January 09, 2026)

Consequent on RBI entering into an agreement with the Government of National Capital Territory of Delhi (GNCTD) on January 05, 2026, the general banking business of GNCTD shall be carried out by RBI with effect from January 09, 2026.

The WMA limit for GNCTD have been fixed at ₹890 crore, effective from January 09, 2026. Accordingly, the revised aggregate WMA limit for State Governments / UTs will be ₹61,008 crore as against the existing limit of ₹60,118 crore.

What are the interest rates on WMA and OD for Central Government?

The interest rates on WMA and OD for Central Government are –

  • WMA – Repo Rate
  • OD – Repo Rate (+) 2% 

What are the interest rates on SDF, WMA and OD for State Governments / UTs?

Scheme Limit Rate of Interest
SDF If availed against net annual incremental investment in CSF and GRF Repo rate (-) 2%
If availed against investment in G-sec / ATBs Repo rate (-) 1%
WMA If outstanding up to 3 months from the date of making the advance Repo rate
If outstanding beyond 3 months from the date of making the advance Repo rate (+) 1%
OD If availed up to 100% of WMA limit Repo rate (+) 2%
If it exceeds 100% of WMA limit Repo rate (+) 5%


References

Reserve Bank of India. (2018, January 15). 'Functions and Workings of RBI'. Retrieved from https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/RWF15012018_FCD40172EE58946BAA647A765DC942BD5.PDF

Reserve Bank of India. (2022, April 01). 'Review of Ways and Means Advances Scheme of State Governments / UTs'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53499

Reserve Bank of India. (2024, June 28). 'Review of Ways and Means Advances Scheme for State Governments/UTs'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58187

Reserve Bank of India. (2025, September 26). 'WMA Limit for Government of India for October 2025 – March 2026'. Retrieved from https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=61299

Reserve Bank of India. (2026, January 09). 'Ways and Means Advances for State Governments/ UTs'. Retrieved from https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=62011


Follow at - Telegram   Instagram   LinkedIn   Twitter

Labels:

Comments

Post a Comment

Popular Posts

Modified Interest Subvention Scheme for Agricultural Loans

Reserve Bank of India (RBI) has published the modified interest subvention scheme (MISS) for short term loans for agriculture and allied activities availed through Kisan Credit Card (KCC) during the financial year 2025-26. Which loans are covered under modified interest subvention scheme (MISS)? The short-term crop loans and short-term loans for allied activities including animal husbandry, dairy, fisheries, bee keeping etc. up to an overall limit of ₹3 lakh to farmers through KCC during the year 2025-26 will be covered for interest subvention. Which lending institutions are covered under MISS? The MISS is applicable to the lending institutions viz. Public Sector Banks (PSBs) and Private Sector Banks (in respect of loans given by their rural and semi-urban branches only), Small Finance Banks (SFBs) and computerized Primary Agriculture Cooperative Societies (PACS) ceded with Scheduled Commercial Banks (SCBs), on use of their own resources.  How much is the interest subvention? The a...
Post a Comment
Read more

Digital Payments Awareness Week 2026

Reserve Bank of India (RBI) is observing digital payments awareness week from March 09 to 15, 2026. Digital Payments Awareness Week (DPAW) Digital Payments Awareness Week (DPAW) is an initiative to highlight the impact and importance of digital payments and to create awareness about safe usage of digital payment products.  Digital Payments Awareness Week (DPAW) 2026 Reserve Bank of India (RBI) is observing DPAW 2026 from March 09 to 15, 2026.  Under the mission ‘Har Payment Digital’, the theme for the current year is ‘Thoda Dhyan Se’ (be alert/ be careful). The theme emphasises the safe use of digital payments. ‘Har Payment Digital’ mission RBI had launched the mission ‘Har Payment Digital’ on the occasion of the DPAW 2023. This is part of RBI’s endeavour to make every person in India a user of digital payments. Previous Digital Payments Awareness Weeks (DPAWs) Year Theme 2025 ‘India Pays Digitally’ under the mission ‘Har Payment Digital’ ...
Post a Comment
Read more

Export and Import of Goods and Services

Reserve Bank of India (RBI) has issued regulations on export and import of goods and services. What are the regulations for declaration of exports? An exporter of goods shall furnish to the specified authority, a declaration in the Export Declaration Form (EDF) specifying the amount representing the full export value of goods, at the time of export. EDF will be deemed to be submitted as part of shipping bill for goods exported through Electronic Data Interchange (EDI) port. An exporter of services shall furnish to the specified authority, a declaration in EDF specifying the amount representing the full export value of services, within 30 days from the end of month in which invoice for services has been raised. The exporter of services who has exported services to one or more recipients in a month, may submit a single EDF for all such exports. The exporter of services other than software, may submit an EDF on or before the date of receipt of payment. In the case of a non-EDI port for ex...
Post a Comment
Read more

FEMA - Regulations on Guarantees

Reserve Bank of India (RBI) had issued regulations governing guarantees under the Foreign Exchange Management Act, 1999 (FEMA). What is a guarantee? A guarantee, including a counter-guarantee, means a contract, by whatever name called, to perform the promise, or discharge a debt, obligation or other liability (including a portfolio of debts, obligations or other liabilities), in the event of default by the principal debtor. Who are the participants in a guarantee transaction? Principal debtor – a person in respect of whose default the guarantee is given. Surety – a person who gives a guarantee. Creditor – a person to whom the guarantee is given. When can a person resident in India act as surety / principal debtor? A person resident in India may act as a surety / principal debtor for a guarantee, subject to conditions that – The underlying transaction for which the guarantee is being given or arranged is not prohibited under FEMA guidelines. The surety and the principal debtor are eligi...
Post a Comment
Read more

Priority Sector Lending (PSL) guidelines (updated as on January 19, 2026)

Reserve Bank of India (RBI) has issued the revised guidelines on Priority Sector Lending (PSL) which has come into effect from April 01, 2025.  To whom does Priority Sector Lending (PSL) guidelines apply? Priority Sector Lending (PSL) guidelines apply to – Commercial Bank [including Regional Rural Bank (RRB), Small Finance Bank (SFB), Local Area Bank (LAB)] Primary (Urban) Co-operative Bank (UCB) other than Salary Earners’ Bank  What are the categories under PSL? The categories under priority sector are as follows – Agriculture Micro, Small and Medium Enterprises Export Credit Education Housing Social Infrastructure Renewable Energy Others What are the PSL targets for banks? The targets and sub-targets set under PSL, to be computed on the basis of the Adjusted Net Bank Credit (ANBC) / Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE) as applicable as on the corresponding date of the preceding year are as below – Categories Total Priority Sector ...
Post a Comment
Read more