The Fiscal Responsibility and Budget Management Act, 2003
5. 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).
1[(3) Notwithstanding anything contained in sub-section (1), the Reserve Bank may subscribe to the primary issues of Central Government Securities due to ground or grounds specified in the 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 2[or converts Central Government Securities held by it with other Securities of the Central Government as mutually agreed between the Reserve Bank and the Central Government].
1. Subs. by Act 13 of 2018, s. 214, for sub-section (3) (w.e.f. 31-3-2018).
2. Ins. by s. 214, ibid. (w.e.f. 31-3-2018).