Ch.5 · NFO Process and Rules · hard
What is the maximum borrowing limit for a mutual fund scheme as per SEBI regulations?
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EXPLANATION
SEBI permits mutual fund schemes to borrow up to 10% of NAV for a maximum period of 6 months, and only to meet temporary liquidity needs for redemptions. Schemes cannot borrow for the purpose of making investments. The borrowing must be at market rates and must be in the scheme's best interest.
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