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RBI gives 6 months more to states for additional borrowing

With an aim to help state governments tide over the financial problems triggered by the Covid pandemic, the RBI on Tuesday extended by six months the additional flexibility provided to states to raise funds through market borrowing and overdraft.

The RBI in April provided additional flexibility to states and UTs to raise funds to deal with the Covid crisis. The flexibility was available till September 30.

“On a review, it has been decided to extend the … measures announced on April 17, 2020 and April 7, 2020 with regard to increase in WMA Limits of states/UTs and overdraft (OD) regulations, respectively, for a further period of six months till March 31, 2021,” the RBI said. The RBI in April had increased Ways and Means Advances limit of states and UTs by 60% over and above the level as on March 31, 2020.