Mutual funds limited to temporary borrowing up to 20% of scheme assets for redemptions and payouts. Regulation 42 permits mutual fund borrowing solely to meet temporary liquidity needs for redemptions, payouts, or certain trade settlements, limited to twenty per cent of the net assets of the scheme and a maximum duration of six months; intraday borrowing is exempt from the twenty per cent limit under board conditions. Mutual funds are otherwise prohibited from advancing loans, and may lend and borrow securities under the Board's short selling and securities lending framework.