The Securities and Exchange Board of India (Sebi) has proposed to expand the scope of intraday borrowing facilities for mutual funds, allowing Asset Management Companies (AMCs) to utilize these borrowings for a broader range of cash management needs beyond just redemption payouts. This proposal follows requests from the Association of Mutual Funds in India (AMFI) and aims to address operational timing mismatches between payout obligations and the receipt of funds. Currently, intraday borrowings are mainly used for trade settlements, forex settlements, and derivative margin obligations. Under the new proposal, AMCs would be permitted to exceed both guaranteed and non-guaranteed receivables, provided they ensure repayment within the same day. This flexibility is expected to enhance fund management efficiency and improve scheme returns, as it allows fund managers to better execute buy and sell transactions. Sebi has opened the floor for public comments on this proposal until June 3, 2026.