The known risks in debt funds, inter alia, are interest rate risk (also known as duration risk, market risk or volatility risk) and credit risk (also known as default risk). What we will discuss is not so much of a new discovery in risk management, but something evolving in the current scenario of the debt market. Let’s go over the basics first to get a perspective to the discussion. A mutual fund scheme can avail loans for meeting redemptions that can be up to 20% of the portfolio size.