Fiscal Responsibility and Budget Management Act,2003
Act No : 39
Section : BORROWING FROM RESERVE BANK
SECTION 05: BORROWING FROM RESERVE BANK
(1) The Central Government shall not borrow from the Reserve Bank.
(2) Notwithstanding anything contained in sub-section (1), the Central Government may borrow from the Reserve Bank by way of advances to meet temporary excess of cash disbursement over cash receipts during any financial year in accordance with the agreements which may be entered into by that Government with the Reserve Bank :
Provided that any advances made by the Reserve Bank to meet temporary excess cash disbursement over cash receipts in any financial year shall be repayable in accordance with the provisions contained in sub-section (5) of Section 17 of the Reserve Bank of India Act, 1934 (2 of 1934).
(3) Notwithstanding anything contained in sub-section (1), the Reserve Bank may subscribe to the primary issues of the Central Government securities during the financial year beginning on the 1st day of April, 2003 and subsequent two financial years :
Provided that the Reserve Bank may subscribe, on or after the period specified in this sub-section, to the primary issues of the Central Government securities due to ground or grounds specified in the first proviso to sub-section (2) of Section 4.
(4) Notwithstanding anything contained in sub-section (1), the Reserve Bank may buy and sell the Central Government securities in the secondary market.
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