In order to provide greater flexibility to the State governments to tide over their cash flow mismatches due to the lockdown, the Reserve Bank of India (RBI) has decided to increase the number of days for which a State or a union territory can be in overdraft continuously to 21 working days from the current stipulation of 14 working days.
The RBI has also increased the number of days for which a State / UT can be in overdraft in a quarter to 50 working days from the current stipulation of 36 working days.
“This arrangement will come into force with immediate effect and will remain valid till September 30, 2020,” the RBI said.
