Mumbai: India’s trustee services industry has long operated in the background. At Axis Trustee Services Ltd, an arm of private sector lender Axis Bank, the new chief executive is pushing to change that.
After over two decades at Axis Bank, Rahul Choudhary moved to Axis Trustee Services as the chief executive in February 2025, bringing with him experience across wholesale banking, including credit, trade finance, and treasury.
With this experience in mind, Choudhary now wants Axis Trustee to play a more active role in pre-empting defaults, instead of playing a passive role.
Regulated by the Securities and Exchange Board of India (Sebi), a trustee acts as an intermediary between the issuer of securities and investors. It keeps a tab on payments being made by companies to investors and takes legal actions to recover in case of defaults. Trustees earn fees paid by issues of securities.
Regulatory changes have expanded trustees’ powers, including greater authority to inspect and access data, experts said.
Choudhary said that the role of the trustee should entail ensuring the right clauses are included in the agreement and that the asset is closely monitored throughout.
“We have been passive, not by design, but how the evolution happened across all trustees,” he said.
Choudhary said he wanted to ramp up monitoring to the level of a bank, tracking early warning signals and analysing various datasets to take action before it happens.
"When I meet the regulators, they say that maybe you made yourself very passive,” he said. “The moment I become an active trustee — the way it should be—I will ask the right questions, I will ensure that I monitor what I should have been doing. This will give comfort to the regulator, and investors.”
Since taking up the role of its CEO, Choudhary has increased the staff count to 120, from about 100 earlier. These include employees who are not on its rolls as well. The company is also moving towards hiring more people with banking experience.
“Earlier, among all the trustees, the push was to get freshers from the legal campuses. People who have worked in the banking credit world are able to monitor debt better because they have seen different cycles,” said Choudhary.
Axis Trustee Services had assets under custody of ₹47.4 trillion as on 31 March 2025, up 22% from the previous year, per disclosures in parent Axis Bank’s annual report. It reported a net profit of ₹21.5 crore in FY25, compared to ₹24.6 crore in FY24, per data from Axis Trustee’s annual report.
At the end of March 2025, it was the fifth largest trustee, with a customer base of 1400 and a 15% market share. Other prominent players in the space include Vistra ITCL (India), Catalyst Trusteeship, and SBICAP Trustee Company.
As part of its push for greater compliance among issuers, Axis Trustee launched a digital platform, Prism, on 17 April. The platform was developed internally, with help from Axis Bank. Choudhary likened it to internet banking platforms that bank customers use to track their finances.
“I have clients who may be NCD (non-convertible debenture) issuers, and this platform allows them to see all documents, compliance reminders, among others,” said Choudhury.
Experts said the role of trustees has been evolving over time. Paras K Parekh, partner at CMS Induslaw, said historically, debenture trustees have played a passive role in debt monitoring, and the Infrastructure Leasing & Financial Services Ltd (IL&FS) and Dewan Housing Finance Corp. Ltd (DHFL) crises exposed the failure of this reactive model.
Parekh was referring to the 2018 default of IL&FS that led to tightening of liquidity across the financial system. The following year, erstwhile DHFL missed interest repayments and was later acquired by the Piramal Group in 2021.
“Recent regulatory amendments address this by granting debenture trustees enhanced powers of inspection and setting up a data platform. However, availability of real-time data will enhance such surveillance; with this, a trustee’s right to intervene, when ‘assets are likely to become insufficient' becomes far more efficacious,” said Parekh.
