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RBI hikes states short-term funding limits

The Reserve Bank of India said on Monday it had hiked limits for ways and means advances, a short-term funding facility, for state governments by 14 per cent to a total of Rs 60.35 billion for the current fiscal year.

The central bank said a state government will be allowed an overdraft facility for 12 working days under the agreement and the amount will not exceed 100 per cent of the total ways and means advances limit.

"In case the overdraft appears in the state's accounts and remains beyond 12 consecutive working days, RBI and its agencies shall stop payments on behalf of the concerned state governments," a statement from the bank said.

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