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Yes Bank Bond Ruling: Coupon Payments Still Unclear
25 Oct
Summary
- Supreme Court overturned Yes Bank's AT-1 bond write-off.
- Yes Bank is evaluating its options and coupon payment decisions.
- The court noted the RBI remained a bystander during the crisis.
Yes Bank is reviewing its strategic options following a Supreme Court decision that nullified the write-off of its ₹8,415 crore Additional Tier 1 (AT-1) bonds. The bank has not yet determined its stance on coupon payments for these bonds, asserting its right to exercise discretion as per the bond terms.
The Supreme Court upheld the Bombay High Court's verdict, which had previously set aside the March 2020 write-off. Justices Dipankar Datta and Augustine George Masih found that Yes Bank's administrator had exceeded authority and acted against regulations. The Bench also noted the Reserve Bank of India's inaction as the bank's Common Equity Tier 1 (CET1) ratio declined significantly.
Yes Bank indicated that reinstating the bond principal would have a pro forma impact of 250 basis points on its CET1 ratio as of June 30, 2026. The bank assured that its daily operations and customer services remain unaffected across all channels. Further disclosures will be made as required.
