The Competition Commission of India (CCI) has issued a 'cease and desist' order against the Trustees' Association of India (TAI) and three of its member debenture trustees for alleged cartelisation. According to reports from The Hindu BusinessLine, the CCI found that TAI along with IDBI Trusteeship Services Limited, Axis Trustee Services Limited and SBI CAP Trustee Company Limited allegedly fixed a benchmark price for providing debenture trusteeship services during FY2020-21 and FY2021-22. The alleged violation prevented independent commercial decision making by debenture trustees and amounted to cartelisation under the Competition Act provisions. In an order dated September 2, 2026, issued under Section 27 of the Competition Act, the CCI stated that such collective fixing of minimum price/fee by TAI, for the provision of debenture trusteeship services, and other follow-on actions prevented independent commercial decision making by the debenture trustees and amounted to cartelisation. The CCI found that the conduct went beyond fee fixing and had the effect of limiting and controlling the market for trusteeship services, with members and non-members allegedly directed not to accept assignments below the prescribed benchmark. The CCI uncovered that TAI adopted a 'Benchmark Pricing' floor structure during a March 23, 2021 meeting, compelling member debenture trustees to abandon independent pricing starting April 1, 2021. The regulator concluded that TAI's directives to members constituted "a typical example of cartel formation by an association whereby the members could be punished for not following its diktats."
The case originated from a complaint by Muthoot Finance after IDBI Trusteeship Services, which had been its debenture trustee for several NCD issuances, quoted significantly higher fees for a proposed ₹982-crore issue in 2021. As reported by The Hindu BusinessLine, the higher fee was attributed to a pricing structure fixed by TAI, under which members were required to follow a benchmark floor price and faced adverse action for deviations. According to the CCI verdict, TAI maintained cartel discipline by monitoring individual quotations, threatening penal repercussions, and forcing non-members to comply. In one instance highlighted by the CCI, trustee MITCON was forced to withdraw a competitive tender bid submitted to the Housing and Urban Development Corporation (HUDCO) and replace it with a higher rate. The CCI found that the conduct went beyond fee fixing and had the effect of limiting and controlling the market for trusteeship services, with members and non-members allegedly directed not to accept assignments below the prescribed benchmark. According to the CCI, this amounted to limiting and controlling the supply of such services. The benchmark trusteeship services fees fixed by OP-1 in 2021 were substantially higher than in 2018 and thus resulted in high costs for services availed, with the pricing behavior of debenture trustees changing significantly after March 2022 when influenced by market forces rather than association diktats.
According to The Hindu BusinessLine, TAI is a professional association of organisations acting as debenture trustees, security trustees, escrow agents, lender agents and trustees of REITs, InvITs and AIFs. The CCI order stated that TAI and its members were not only setting benchmark prices for member debenture trustees but were also attempting to influence non-members to follow the same pricing structure. This approach was designed to eliminate competitive pricing by non-members and ensure significantly higher trusteeship service fees without internal competition among members. The proceedings followed a complaint filed by Muthoot Finance in August 2021, when the company had proposed a private placement of secured non-convertible debentures worth ₹982 crore and sought a fee quotation from IDBI Trusteeship. The CCI noted that the pricing arrangement had been discussed as early as 2018 and that TAI members had themselves considered whether common pricing could amount to cartelisation. The Commission found that OP-1 and its members were not only setting the benchmark prices for the member DTs but were also attempting to nudge non-member DTs to follow the same, with communications sent to non-members inviting them to join OP-1 and asking them not only to follow the Benchmark Pricing, but in some cases even asking them not to issue a single quote in the listed issuance market till the time they joined OP-1.
As reported by The Hindu BusinessLine, the CCI held certain officials of the association and the companies liable for the alleged anti-competitive practice. The CCI found that TAI had collectively decided on a benchmark price for trusteeship services and that subsequent actions prevented trustees from independently determining their commercial terms. The Commission also held certain officials of TAI, IDBI Trusteeship Services, Axis Trustee Services and SBI CAP Trustee Company liable under Section 48 of the Competition Act. Despite recording findings of infringement, the regulator did not impose a monetary penalty on either the entities or the officials concerned due to certain mitigating factors including cooperation with the investigation. The CCI considered the limited role of individual trustees, absence of prior competition law violations and their cooperation during the probe as mitigating factors. The CCI found the parties in contravention of Sections 3(3)(a) and 3(3)(b) read with Section 3(1) of the Competition Act. The order has directed the industry body and the trustees to cease and desist from the anti-competitive conduct. The Commission noted that significant competition benefit in the DT market has been calculated by the DG on account of the OPs not following the Benchmark Pricing in a number of instances in FY 2022-23, demonstrating the practical impact of the cartelisation on market competition.
The CCI warned that any repetition of the conduct could be treated as recidivism and result in aggravated consequences for the entities and officials concerned. According to the CCI, the findings were based on minutes of TAI meetings and email exchanges, demonstrating the regulator's thorough investigation process. The order directs the four entities to cease and desist from such anti-competitive practices, marking a significant regulatory intervention in the debenture trusteeship services market. The regulator concluded that these coordinated actions restricted market supply and eliminated competitive choices for issuers, highlighting the broader impact of the cartelisation on market competition. The order has been issued under Section 27 of the Competition Act, providing the regulatory framework for addressing such anti-competitive practices in the financial services sector. The CCI observed that the conduct of OP-1 resulted in AAEC (Anti-Competitive Agreement Effect) in the market for provision of debenture trusteeship services, with members and non-members dictated not to provide services to the issuers of debentures below the benchmark fee, and instances where debenture trustees were directed not to issue a single quote until they became members of OP-1 and followed the Benchmark Pricing.
