The Reserve Bank of India (RBI) has enhanced the Cash Credit Limit (CCL) to Rs 44,028 crore to the Punjab Government till November-end for the paddy procurement season for the second time.

• Notably, during the current kharif marketing season, the procurement has crossed the last year’s 150.46-LMT mark. As much as 191.72 LMT paddy has been bought till date, thereby registering an increase of 27 per cent.
• With the RBI extending the CCL by Rs 8,475.39 crore, the sanctioned limit has risen from Rs 35,552.61 crore to Rs 44,028 crore.

About Cash Credit Limit

• A cash credit loan by the RBI allows a government to withdraw money from the account that the RBI maintains.
• Government can withdraw as many times, but up to its withdrawal limit.
• The borrowing limit is decided on the basis of the government's credit history or creditworthiness, and various other factors such as necessity and social implications.
• Agriculture based economies like Punjab usually use the limit towards procurement of food grains.

Different from Ways and Means Advances

Ways and means advance is a mechanism used by Reserve Bank of India 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.