Security Trusteeship is a contractual arrangement amongst Borrower, Lenders and Security Trustee materialized by executing a document called Security Trustee Agreement (STA) wherein the Borrower, settles a trust with the Security Trustee. Trust will hold Secured Properties (any kind of movables, immovables, pledge of shares, rights, etc.) and the Security Trustee will act as a Trustee to such Trust.

Advantages to Lenders:

•  Hold security as per terms of sanction for the benefit of Lenders in respect of Bilateral or Consortium lending programs.
•  Vetting of documents before execution.
•  Ensure permission/s from Statutory / Regulatory / Existing Lenders /Lessor’s prior to creation of security.
•  Obtaining all Corporate Resolutions before execution and Borrowings.
• Vetting of title search reports of the mortgagor and inform the short coming/s     if any to the Lenders. This enhances the scrutiny and it becomes double check
  i.e. from Lender as well as the holder / Trustee.
• Safe keep the document in a fire proof vault at respective places of execution due to stamp duty implication and also avoiding frequent transfer of title deeds from one Lender to another in case of down-selling.
•  Confirm to the Lenders about the security held by us.
•  Hold pledge / NDU in our favour as per SAST guidelines for individual /several Lenders; thereby shares are encumbered only to oneparty. Act as per Lender/s instructions for release of security. Banks are not allowed to holdmore than 30 % equity stake in any company we can hold 30% equity stake on their behalf. Appropriate disclosures in respect of listed shares are done in stock exchanges to effect the correct pledge position.
•  Compliance with registration of charges as specified under Companies Act,2013.
•  Compliance with CERSAI rules.
•  By extending security in favour of Trustee, Lender can assign the loan to suit his needs without incurring additional expenses towards stamp duty etc
•  Obtain consent of Lenders during the currency of loan with regards to issuance of NOC or Security issue and thereby assure protection of the interest of the Lenders.
• Verify the letters from Lenders prior to modification/ satisfaction of loan.
•  Execute re-conveyance deeds on satisfaction.
• Furnish confirmation letter on request from Lenders for Audit purposes.
• Undertake enforcement on the directions of Lenders.

Advantages to Borrowers:

•  Single point of contact in consortium funding or multiple banking structures.
•  Single charge created in favour of Trustee for the benefit of various Lenders. This helps Borrower in saving stamp duty
•  It also helps Borrower at the time of any modification/s and satisfaction
•  Borrower deposits all original security documents/ deeds to a professional independent body and not to any single Lender
•  Borrower approaches Trustee for all his charge in security extended to Trustee for the benefit of Lenders
•  By extending security in favour of Trustee, Borrower can assign the loan to suit his needs without involvement of lenders