Sebi lets mutual funds use intraday borrowing

ET BureauLast Updated: Jul 11, 2026, 07:46:00 AM IST

Synopsis

Sebi has issued revised norms for mutual fund intraday borrowing. These new rules will become effective from September 1, 2026. Mutual funds can now borrow temporarily to manage liquidity mismatches. This allows them to meet unit holder payouts and investment pay-ins. The borrowing quantum will be linked to expected daily receivables.

Mumbai: The Securities and Exchange Board of India (Sebi) Friday issued revised norms for intraday borrowing by mutual funds, allowing asset managers to temporarily borrow during the trading day to bridge liquidity mismatches caused by differences in settlement timings.

The new rule will come into effect from September 1, 2026.

The regulator said mutual funds can avail intraday borrowings to meet unit holder payouts, including redemptions, income distribution cum capital withdrawal (IDCW) and interest payments, make pay-ins for investments, meet mark-to-market obligations and foreign exchange settlements, and repay existing borrowings.

Sebi said the quantum of borrowing will be linked to receivables expected during the day.