SEBI has constituted an Expert Working Group to conduct a comprehensive review of the regulatory framework governing debenture trustees, signalling the regulator’s intent to modernise rules that have remained largely unchanged since 1993. The group will be chaired by Ananta Barua, a former Whole Time Member of SEBI, with Rajnish Kumar, the former Chairman of State Bank of India, serving as co-chairperson. The move comes as India’s corporate bond market expands rapidly and the role of debenture trustees in protecting investor interests grows increasingly critical.
What Are Debenture Trustees?
A debenture trustee is an independent financial entity appointed by a company to safeguard the interests of debenture holders, who are investors that lend money to a company by purchasing debentures or bonds. Under Section 71(5) of the Companies Act, 2013, any company issuing debentures to more than 500 investors must appoint a debenture trustee before issuing the prospectus. The trustee acts as a fiduciary, ensuring that the issuer complies with the terms of the trust deed, monitoring the security cover available to debenture holders, and taking enforcement action in case of default.
Eligible entities include scheduled commercial banks, public financial institutions, insurance companies, and other bodies corporate registered with SEBI. An entity seeking to act as a debenture trustee must meet a minimum net worth requirement of ₹10 crore as specified under the SEBI (Debenture Trustees) Regulations, 1993. The trustee cannot be closely associated with the issuing company, ensuring independence and unbiased oversight.
SEBI registers and regulates all debenture trustees in the country. As of 2026, there are 26 registered debenture trustees in India, including major banks and specialised trusteeship firms.
Why a Review Now?
The SEBI (Debenture Trustees) Regulations, 1993 were enacted over three decades ago, when India’s capital markets were at a very different stage of development. Since then, two major developments have made a comprehensive review essential.
First, the introduction of the Insolvency and Bankruptcy Code (IBC) in 2016 fundamentally changed the resolution framework for distressed companies in India. The IBC provides a time-bound, creditor-driven mechanism for insolvency resolution and gives debenture trustees a defined role as representatives of financial creditors in resolution proceedings. However, the 1993 regulations predate the IBC and do not fully incorporate this framework, creating gaps in how trustees exercise their powers during corporate stress.
Second, India’s corporate bond market has grown dramatically over the past decade. Outstanding corporate bond issuances rose from ₹17.5 trillion in FY2015 to ₹53.6 trillion in FY2025, recording an annual growth rate of nearly 12%, according to a NITI Aayog report published in December 2025. This expansion has brought new categories of investors, more complex instruments, and a greater need for robust trustee oversight. The NITI Aayog report specifically noted that the debenture trustee framework remains constrained by fragmented regulations and weak statutory powers, which limits trustees’ capacity to enforce covenants or safeguard investors during stress events.
SEBI itself stated that the financial sector has undergone significant transformation since 1993, and the increasing importance of debenture trustees in protecting investor interests has made it necessary to realign regulations with changing market dynamics.
The Expert Working Group: Composition and Mandate
The Expert Working Group features a blend of regulatory experience, industry expertise, and legal knowledge. The composition reflects SEBI’s effort to bring diverse perspectives to the review process.
| Name | Designation | Role |
|---|---|---|
| Ananta Barua | Former Whole Time Member, SEBI | Chairperson |
| Rajnish Kumar | Former Chairman, State Bank of India | Co-Chairperson |
| Dr O.N. Ravi | Former General Counsel and EVP, CCIL | Member |
| Rahul Choudhary | MD and CEO, Axis Trustee Services | Member |
| Pratapsingh Nathani | MD and CEO, Beacon Trusteeship | Member |
| Ashish Pahariya | Partner, DSK Legal | Member |
| Vinod Kothari | Partner, Vinod Kothari and Co. | Member |
| Representative | Finance Industry Development Council | Member |
| Ajit Nath Jha | Vertical Head, Treasury and Resource Management, SIDBI | Member |
| Pranjal Sharma | Director, The CFO Board | Member |
| Mehul Pandya | MD and Group CEO, CareEdge Ratings | Member |
| Debashis Bandyopadhyay | Chief General Manager, SEBI | Member Secretary |
The group’s terms of reference include a comprehensive review of the SEBI (Debenture Trustees) Regulations, 1993, examination of representations and suggestions from market participants, recommending measures to strengthen the role of debenture trustees, reviewing net-worth requirements applicable to trustees, and studying any other relevant matters related to debenture trusteeship activities.
SEBI has also invited suggestions from the public and market participants on improving and strengthening the regulatory framework. Suggestions can be submitted until July 15, 2026, making the review process open and consultative.
Key Personalities Behind the Panel
Ananta Barua served as a Whole Time Member of SEBI from August 2018 to July 2023, capping a career spanning over three decades at the regulator. He joined SEBI in 1992, the same year it became a statutory body, and held various positions including Executive Director. During his tenure, he handled departments such as Market Intermediaries Regulation, Enforcement, Legal Affairs, Mutual Funds, and Debt and Hybrid Securities. He was instrumental in laying the regulatory framework for Alternative Investment Funds, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and corporate bonds. Barua also served as a member of the International Organization of Securities Commissions (IOSCO) Policy Committee on Investment Management from 2013 to 2017 and was part of the G20 Green Finance Study Group.
Rajnish Kumar served as the 25th Chairman of State Bank of India from October 2017 to October 2020. A career banker with nearly four decades at SBI, he joined as a probationary officer in 1980. During his chairmanship, he oversaw the merger of SBI’s associate banks and the launch of YONO, SBI’s digital banking platform. His expertise spans corporate credit, project finance, and international banking, having managed SBI’s UK operations after the 2008 financial crisis and earlier serving as Vice President (Credit) in Toronto. Post-retirement, he serves on the boards of several prominent companies including Larsen and Toubro, Hero MotoCorp, and HSBC Asia Pacific.
The Bigger Picture: Deepening India’s Corporate Bond Market
This review is part of a broader policy push to develop India’s corporate bond market as an alternative to bank financing. A deep and liquid corporate bond market reduces the systemic concentration risk in the banking system and provides long-term capital for infrastructure and industry.
The NITI Aayog report on deepening the corporate bond market, released in December 2025, highlighted that India’s corporate bond market now accounts for around 15-16% of GDP, a significant improvement but still well below levels seen in countries like South Korea, Malaysia, and China. The report noted several structural challenges: the market remains concentrated among top-rated issuers, private placements dominate over public issuances, and participation from retail investors, MSMEs, and foreign portfolio investors is limited.
A stronger debenture trustee framework is expected to boost investor confidence in the bond market. When investors know that trustees have the power and mandate to act decisively during stress events, they are more likely to participate. This is especially important for retail investors, who lack the resources to monitor issuers individually and rely on trustees as their representatives.
SEBI has taken several steps in recent years to strengthen the trustee framework. In October 2025, it notified amendments to the DT Regulations, NCS Regulations, and LODR Regulations, introducing a standardised debenture trust deed format, clearer rules on recovery expense funds, and enhanced monitoring obligations for trustees. The current review aims to build on these changes and address remaining gaps.
The Way Forward
The Expert Working Group is expected to submit its recommendations within a few months of its formation. Given the composition of the panel and the breadth of its mandate, the review is likely to result in significant changes to how debenture trustees operate in India.
Key outcomes could include clearer alignment of trustee duties with the IBC framework, revised net-worth requirements that reflect the scale of modern bond issuances, stronger enforcement mechanisms for trustees to act during defaults, and simplified compliance procedures that reduce costs without compromising investor protection.
SEBI’s consultative approach, including the invitation for public comments until July 15, ensures that the final recommendations will benefit from input across the market ecosystem including issuers, trustees, investors, and legal practitioners.
Key Takeaways
- SEBI constituted an Expert Working Group in June 2026 to conduct a comprehensive review of the SEBI (Debenture Trustees) Regulations, 1993.
- The group is chaired by Ananta Barua, former Whole Time Member of SEBI, and co-chaired by Rajnish Kumar, former Chairman of State Bank of India.
- The review aims to align the 1993 regulations with the Insolvency and Bankruptcy Code, 2016 and the evolving corporate bond market.
- SEBI has invited suggestions from the public and market participants until July 15, 2026.
- A debenture trustee is an independent entity appointed under Section 71(5) of the Companies Act, 2013 to protect the interests of debenture holders.
- India’s outstanding corporate bond issuances grew from ₹17.5 trillion in FY2015 to ₹53.6 trillion in FY2025, reflecting nearly 12% annual growth.
