New Delhi, March 14 -- Securities and Exchange Board of India (SEBI) has laid down conditions for intraday borrowings by mutual funds, stating that the facility will be allowed primarily to address short-term timing mismatches in fund flows and will come into effect from April 1, 2026.

In a circular issued on Friday, the market regulator said the move follows the notification of the SEBI (Mutual Funds) Regulations, 2026, which will take effect from April 1.

Explaining the need for such borrowings, SEBI said there is often a timing mismatch between inflows and outflows in certain schemes.

"As per prevalent industry practice, primarily for liquid and overnight schemes, the redemption payouts to the investors are processed in the morning ...