BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the advances allowed under DRI Scheme by commercial banks
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the advances allowed by commercial banks under Twenty Point Economic Programme
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the temporary advances made to the government by its bankers to bridge the interval between expenditure and the flow of receipts of revenues
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All of the above
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Detailed explanation-1: -Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy to provide to States, banking with it, to help them tide over temporary mismatches in the cash flow of their receipts and payments.
Detailed explanation-2: -What are Ways and means advances (WMA)? Ways and means advances are special features of the Indian economy. WMA are temporary advances given by the RBI to the centre and state governments to tide over any mismatch in receipts and payments. It was introduced in 1997 and comes under Section 17(5) of the RBI Act of 1934.
Detailed explanation-3: -2.2 Under Section 17(5) of RBI Act, 1934, the RBI provides Ways and Means Advances (WMA) to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments.
Detailed explanation-4: -The term “ways and means” originated with the Parliament of England and refers to the provision of revenue to meet national expenditure requirements and to implement the objectives of economic policy. The ways and means are provided by the imposition of taxation.
Detailed explanation-5: -It has been decided, in consultation with the Government of India, that the limit for Ways and Means Advances (WMA) for the first half of the financial year 2022-23 (April 2022 to September 2022) will be ₹1, 50, 000 crore.