Sets up panel to review ways and means advances limit for States
The Reserve Bank of India (RBI) has announced more measures to fight economic disruptions caused by COVID-19, including extension of the realisation period of export proceeds and allowing States to borrow more.
“Presently, the value of the goods or software exports made by exporters is required to be realised fully and repatriated to the country within nine months from the date of exports.
“In view of the disruption caused by the pandemic, the time period for realisation and repatriation of export proceeds for exports made up to or on July 31, 2020, has been extended to 15 months from the date of export,” the RBI said. The measure will enable 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.
The central bank has also formed an advisory committee to review the ways and means limit for State governments and union territories. Till the panel submits its report, the central bank has increased the ways and means advances limit by 30% for States and union territories.
“Pending submission of the final recommendations by the Committee, it has been decided to increase the WMA limit by 30% from the existing limit for all States/UTs to enable State governments to tide over the situation arising from the outbreak of the COVID-19 pandemic. The revised limits will come into force with effect from April 1, 2020 and will be valid till September 30, 2020, the RBI said.
The ‘Ways and Means Advances’ is a scheme that helps meet mismatches in receipts and payments of the government. Under this scheme, a government can avail itself of immediate cash from the RBI.
The central bank has also deferred the implementation of counter cyclical capital buffer (CCyB) for banks.
“Based on the review and empirical analysis of CCyB indicators, it has been decided that it is not necessary to activate CCyB for a period of one year or earlier, as may be necessary,” the RBI said.
Source: Read Full Article