Market regulator Securities and Exchange Board of India (Sebi) has proposed expanding the scope of intraday borrowing facilities for mutual funds, allowing fund houses to use such borrowings for a wider range of cash management needs beyond just redemption payouts. The market watchdog released a consultation paper on Wednesday, seeking public comments on this by June 3, 2026. The market regulator said the move follows representations from the Association of Mutual Funds in India (AMFI) and aims to address operational timing mismatches between payout obligations and receipt of funds from various sources. Sebi noted that while intraday borrowings were earlier permitted mainly to bridge gaps linked to guaranteed receivables from entities such as the Government of India, RBI and CCIL, mutual funds increasingly use such facilities for broader liquidity management purposes.