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Yes Bank Bond Case: SC Reserves Verdict
20 Apr
Summary
- Supreme Court has concluded hearing arguments on AT-1 bonds write-down.
- Yes Bank faces potential financial liability from the bond case ruling.
- ₹8,415 crore in AT-1 bonds were written down to zero in 2020.
The Supreme Court has concluded its hearing regarding the write-down of Yes Bank's Additional Tier-1 (AT-1) bonds and has reserved its order. The lender indicated that any potential financial liability resulting from the court's decision would be accounted for in future financial reports, though no material impact is anticipated. This legal challenge originated from Yes Bank's severe crisis in 2020.
On March 5, 2020, the government imposed a moratorium on Yes Bank, leading to its board being superseded by the Reserve Bank of India. Subsequently, the Yes Bank Reconstruction Scheme was implemented. An administrator, acting for the bank, zeroed out ₹8,415 crore of AT-1 bonds based on contractual terms and RBI guidelines, affecting bondholders.
Legal actions followed, with bondholders filing numerous petitions. While some cases were adjudicated at lower courts, including the Bombay High Court ruling against Yes Bank, the Supreme Court is now set to deliver the final verdict after hearing appeals from Yes Bank, the RBI, and the government.
