SEBI Extends Deadline For Mutual Fund Intraday Borrowing Guidelines To July 15

New Delhi: Markets regulator Sebi on Wednesday deferred the implementation of guidelines permitting mutual funds to undertake intraday borrowing from financial institutions, including banks, to July 15. The framework was earlier slated to come into effect from April 1.

"In order to address the operational challenges raised by asset management companies with respect to intraday borrowings by mutual funds, it has been decided that the applicability of guidelines related to the intraday borrowings... shall now come into effect from July 15, 2026," Sebi said in its circular.

Under the new framework, the board of an asset management company (AMC), as well as the board of trustees, will be required to approve a policy governing the use of intraday borrowing facilities. Further, the AMC will also disclose the approved policy on its website, Sebi had stated.

The intraday borrowings can be used only for specific purposes -- repurchase or redemption of units, payment of interest or Income Distribution-cum-Capital Withdrawal (IDCW) payouts to unitholders.

The regulator also stipulated that the borrowing amount cannot exceed the "guaranteed receivables" expected on the same day.

Receivables eligible for such intraday borrowings include maturity proceeds from TREPS (Triparty Repo in Government Securities), proceeds from reverse repo transactions, maturity proceeds from government securities, such as G-Secs, Treasury Bills, State Development Loans (SDLs) and STRIPS, interest payments on G-Secs and SDLs, as well as sale proceeds of these securities.

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