What is the role of a debenture trustee?

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A debenture trustee plays an important role in NCD public issues. Here are some of the roles and responsibilities:

  • Calls for periodic reports from the issuer company to check if everything is under control.
  • Takes possession of the trust property as per the provisions of the trust deed.
  • In case of default, move to assets of the company to fulfil the debt obligation thereby protecting the interest of the debenture holders.
  • To ensure at all times that the property charged to debentures is free any other claims other than to fulfil the debenture holder obligations.
  • To exercise due diligence on the issuer company.
  • In case of any breach, a debenture trustee should at once take steps for protecting the interest of debenture holders.
  • To keep a track that the debenture conversion or redemption is done as agreed as per the offer.
  • To inform the board of any breach.
  • To appoint a nominee director on board of the issuer company.


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