RBI relaxes overdraft facility stipulations for states, UTs

The RBI said this will “provide greater flexibility to the state governments to tide over their cashflow mismatches”

Moneycontrol News

April 08, 2020 / 14:36 IST

The Reserve Bank of India (RBI) has permitted state governments and union territories (UTs) greater flexibility for availing overdraft facilities with immediate effect till September 30.

In a statement issued on April 7, the central bank said it had decided after a review to increase it to 21 working days, the period for which a state or UT could be in overdraft continuously. The previous stipulation was of 14 working days.

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The number of days a state or UT can be in overdraft in a quarter has also been increased to 50 working days from the current stipulation of 36 working days.

All other stipulations remain the same. The RBI said this would “provide greater flexibility to the state governments to tide over their cash flow mismatches”.

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