Way and means advances (WMA) limit up 30 pc
MUMBAI: The maximum period allowed for exporters of goods and software to realise and repatriate the export proceeds into the country has been extended from the current 9 months to 15 months for all exports made up to or on July 31, 2020.
This has been done in view of the disruption caused by the COVID-19 pandemic. “The measure will enable the exporters to realise their receipts, especially from COVID-19 affected countries within the extended period and also provide greater flexibility to exporters to negotiate future export contracts with buyers abroad,” an RBI release noted.
Way and means advances
The Reserve Bank of India (RBI) has increased the limits for ways and means advances (WMA) for the state governments and Union Territories (UTs) by 30 per cent from the existing level. The revised limits will come into force with effect from April 1, 2020 and will be valid till September 30, 2020.
Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy to provide the States and Union Territories banking with it an additional support to tide over temporary mismatches in the cash flow of their receipts and payments.
They are not sources of finance but are meant to provide support to overcome temporary mismatch/shortfall in revenue or other receipts while meeting the government liabilities. They have to be periodically adjusted to enable use of such financing for future mismatches.
RBI said this has been done to enable the State Governments and UTs to address the issues arising from the outbreak of the COVID-19 pandemic.
Reserve Bank had constituted an Advisory Committee, with Sudhir Shrivstava as chairman, to review the Ways and Means limits for State Governments and Union Territories (UTs). Submission of the final recommendations by the committee is still pending.