The Securities and Exchange Board of India is considering wider use of intraday borrowing by mutual funds to enhance cash management. The move would extend beyond current limits tied to redemption payouts. It seeks to address timing gaps between outflows and incoming funds.
Sebi is proposing changes that would allow mutual funds to use intraday borrowing as a general cash management tool. At present, such borrowing is restricted to covering redemption payouts. The regulator aims to give fund managers greater flexibility while improving overall returns through better handling of liquidity needs.