SEBI Circular on Intraday borrowing facility availed by mutual funds

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Date of Issue: 10-07-2026

Highlights of  the Circular :

Summary

SEBI has introduced an intraday borrowing facility for mutual funds to help address temporary liquidity mismatches arising from differences in market settlement timings. The circular supersedes the earlier borrowing guidelines and becomes effective from 1 September 2026.

Key provisions

• Permitted purposes for intraday borrowing
  
  
  • Payment of investor redemptions, IDCW, interest, and other unitholder payouts.
  • Meeting pay-in obligations for investments.
  • Mark-to-market (MTM) obligations and foreign exchange settlements.
  • Repayment of existing borrowings.

• Limits on borrowing

  • Borrowing should generally be backed by:
    • Guaranteed receivables (e.g., RBI inflows, clearing corporation settlements, subscription proceeds).
    • Non-guaranteed receivables expected to be received by the end of the day (e.g., maturity proceeds, secondary market settlements for NCDs, CPs, CDs, OTC swaps).
  • Additional intraday borrowing is allowed solely to meet redemption and other unitholder payout obligations under the regulations.
    
    
• Repayment requirement
  • All intraday borrowings must be repaid by the end of the same day.
  • If an intraday borrowing extends overnight, it must comply with the existing regulatory limits and permitted purposes for overnight borrowing.
    
    
• Governance and record-keeping
  • The Boards of the AMC and Trustees must approve an intraday borrowing policy, which must be published on the AMC's website.
  • AMCs must maintain scheme-wise records explaining the liquidity mismatch and expected repayment source.
  • AMCs must continue complying with relevant provisions of the SEBI Mutual Fund Regulations and Master Circular.
    
    
• Cost responsibility
  
  
  • The AMC—not the mutual fund scheme or its investors—must bear:
    • The cost of intraday borrowing.
    • Any losses or additional costs resulting from delays or failure in receiving expected receivables.