Consider the following statements about the Ways and Means Advances (WMA):

  1. The WMA scheme helps to meet temporary mismatches in the receipts and payments of the government
  2. Both State Governments and Central Government is eligible for WMA
  3. The limits for WMA are mutually decided by the RBI and the Government of India

   Which of the above statements is/are correct?

Answer: [D] 1, 2 & 3

The Reserve Bank of India gives temporary loan facilities to the centre and state governments as a banker to government.This temporary loan facility is called Ways and Means Advances (WMA). It helps to handle temporary mismatch in the cash flow. The limits for WMA are mutually decided by the RBI and the Government of India.

This question is a part of GKToday's Integrated IAS General Studies Module