Sebi intraday borrowing guidelines for mutual funds delayed to July 15, 2026

Sebi has pushed back rules that would let mutual funds take intraday loans from banks. The regulator moved the start date to July 15, 2026. The rules had been due to begin on April 1. Sebi said asset management companies raised operational issues on using such borrowing.

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The regulator confirmed the revised timeline through a circular issued on Wednesday. It linked the delay to problems reported by fund houses. Sebi said, "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 intraday borrowing rules for mutual funds: approvals and disclosure

Under the Sebi intraday borrowing rules for mutual funds, governance approvals are mandatory. The board of the asset management company must clear a policy for such borrowing. The board of trustees must also approve that policy. Sebi also said the AMC will place the final policy on its website.

The Sebi intraday borrowing rules for mutual funds also limit how the money can be used. Funds may borrow only for defined daily needs. These include repurchase or redemption of units. They also include payment of interest. Another permitted use is Income Distribution-cum-Capital Withdrawal IDCW payouts to unitholders.

Sebi intraday borrowing rules for mutual funds: caps linked to same-day receivables

Sebi intraday borrowing rules for mutual funds set a ceiling on the loan size. The borrowed amount must stay within guaranteed receivables due that day. These receivables can come from maturity proceeds of TREPS Triparty Repo in Government Securities. They can also come from reverse repo maturity proceeds.

The receivables list also covers several government debt cashflows. It includes maturity proceeds from G-Secs and Treasury Bills. It also includes State Development Loans SDLs and STRIPS. Sebi added interest payments on G-Secs and SDLs. Sale proceeds of these securities also qualify as eligible receivables.

With the new Sebi intraday borrowing rules for mutual funds, the regulator kept the scope narrow. The delay gives AMCs more time to align systems and controls. The framework still requires clear board-approved policies and public disclosure. It also keeps borrowing tied to defined payouts and assured same-day receivables.

With inputs from PTI