Gulte News
The Reserve Bank of India (RBI) has served a big warning to Andhra Pradesh on its Over Draft (OD) limit. Regarding the same RBI’s general manager has written to AP Finance ministry’s Principal Secretary on 9th of this month.
In the letter RBI claimed that AP has exceeded the Special Drafting Provisions and is still OD due to this, the state government hasn’t paid salaries to its employees.
RBI also stated that it would put the borrowings and other financial matters on hold because the central bank acts as a banker when the state crosses the specified loan limitations.
As per RBI regulations, if the state remains in OD for five consecutive days, the central bank will stop the financial support and according to RBI observations, the state has stayed in OD for 14 consecutive days. From December 1st to 8th, the AP state’s account in RBI was in OD for seven consecutive working days and in this quarter, the state was in OD limit for 19 days.
If this situation continues, the state would go into deep financial crisis and may lead to chaos warned the RBI.
The AP government is yet to react on RBI’s letter but is maintaining unavailable to comment with the letter getting leaked to the media.
This is not the first instance the AP government received such warning from RBI but the financial dealings of the state haven’t changed mainly because of AP CM Jagan’s over ambitious welfare schemes which are just a ‘button’ away.
Tags ANdhra Pradesh RBI
