SEBI allows intraday borrowing for MFs to meet investor redemption payouts

SEBI has formally permitted mutual funds to undertake intraday borrowings to manage temporary cash mismatches while processing investor redemptions. "Such borrowings shall not exceed 20% of net assets of a scheme and duration…shall not exceed a period of 6 months," SEBI said. Intraday borrowing, taking effect from April 1, is allowed only against guaranteed receivables due on the same day.