Major issues Minimum balances requirements in government The RBI is authorized to provide Ways and Means Advances to Central and State Governments in terms of Section 17(5) of the RBI Act. Until 1994-95, the needs of Government were accommodated through automatic monetisation by issuing ad hoc Treasury Bills at 4.6 per cent.
Considering the ill effects of automatic monetisation of Government deficit, the Reserve Bank and the Government agreed mutually in September 1994 to restrict the issue of ad hocs for the year-end and also within the year and for scrapping the issue of ad hoc treasury bills from 1 April 1997.