Yes Bank Moves Supreme Court to Review Order on AT-1 Bonds Write-off
· Business · Economic Times
Yes Bank has filed a petition with the Supreme Court seeking a review of its October 15 order. That order upheld a Bombay High Court judgment from January 20, 2023, which had quashed the bank administrator's decision to write off Additional Tier 1 bonds worth Rs 8,415 crore in March 2020. Additional Tier 1 bonds are perpetual riskier bonds issued by banks to strengthen their capital base, and the Reserve Bank of India can order their cancellation during financial distress. The Supreme Court previously questioned the handling of the bonds by the triumvirate of the RBI, the Yes Bank administrator, and the bank itself, noting that the RBI acted as a bystander while the CET1 ratio dropped to 0.6 per cent. The apex court stated that exposing investors to such uncalled-for risk due to administrative lapses was highly unfair.
Why it matters
The Supreme Court's final ruling on these AT-1 bonds will determine liability and financial recovery for investors who absorbed losses during Yes Bank's 2020 rescue, setting a crucial precedent for how risky bank debt is handled during institutional bailouts in India.
Read the original report — Economic Times
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