SEBI Proposes New Intraday Borrowing Rules For Mutual Funds | What It Means For Investors

The Securities and Exchange Board of India (SEBI) has proposed a major change to mutual fund operations by allowing fund houses greater flexibility in availing intraday borrowings. At present, mutual funds use such facilities mainly to bridge temporary timing mismatches between redemption payouts and receivables during the trading day. However, SEBI is now considering permitting asset management companies (AMCs) to use intraday borrowings for purposes beyond investor redemptions, while also allowing borrowings to exceed same-day receivables in certain cases. The move follows representations made by the Association of Mutual Funds in India (AMFI) and is aimed at improving liquidity management, operational efficiency and smoother fund execution during volatile market conditions. In this video, we explain what intraday borrowing means, why SEBI wants to expand the framework, how it could benefit mutual funds, and what safeguards the regulator has proposed to ensure these borrowings are repaid within the same trading day.