Multiple Choice Questions on With reference to Ways and Means Advance scheme consider following statements It was introduced to m........... for UPSC Civil Services Examination (General Studies) Preparation

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Multiple Choice Questions

With reference to Ways and Means Advance scheme consider following statements It was introduced to m...........

Economic Affairs Money Supply and Monetary Policy
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    With reference to Ways and Means Advance scheme, consider following statements

    1. It was introduced to meet mismatches in the receipts and payments of the government.
    2. Under the scheme both central and state government can avail of immediate cash from the RBI.
    3. The limits for advances are decided by the RBI only.

    Select the correct statement.

    1&2 only

    Correct Answer

    2&3 only

    Incorrect Answer

    1&3 only

    Incorrect Answer

    All of the above

    Incorrect Answer
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    Explanation:
    • The WMA scheme was designed to meet temporary mismatches in the receipts and payments of the government. This facility can be availed by the government if it needs immediate cash from the RBI. The WMA is to be vacated after 90 days. Interest rate for WMA is currently charged at the repo rate. The limits for WMA are mutually decided by the RBI and the Government of India.
    • The Reserve Bank of India (RBI) gives temporary loan facilities to the central and state governments. This loan facility is called Ways and Means Advances (WMA).

    By: Shubham Tiwari
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