Appt of Debenture Trustee

If you follow this RBI link, point no. 8 clearly states that every issuer of NCD shall appoint a debenture trustee for each issuance.

www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=2071

Hi Shreya,

Even I am not sure about the associate company, but i just read Ramaiya wherein under sec 117B under para scope of section, it is said 'the provision of this section do not apply to debentures issued on private placement basis.However in view of the provision of sec 117C,the company has to create security in favour of debenture-holders, which necessarily involves appointment of trustees. Also see provisio to sub-section (3) of section 67."

In the light of above discussion it is mandatory to appoint debenture trustee even if it is being issued to associate company.

Incase if you have found the solution please make sure that you share the opinion as I am keenly interested in knowing the final process. Thanks

If there is only one debenture holder, you can create charge directly in favor of debenture holder. However in case of transfer of debenture, you have to transfer the mortgage deed/charge similtenously.

whats the link give above is "DRAFT guide lines" from RBI. I am not aware whether same has been made enforcealbe by RBI or Not.

Suresh