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YES Bank Files Review Against Rs 8,415 Crore AT-1 Bond Write-Down Ruling
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YES Bank Files Review Against Rs 8,415 Crore AT-1 Bond Write-Down Ruling

L

LawWorld

YES Bank has asked the Supreme Court in India to reconsider its October 15, 2026 judgment upholding the Bombay High Court's decision to invalidate the write-down of Rs 8,415 crore in Additional Tier-1 bonds.

The review petition under Article 137 of the Constitution was disclosed by the private sector lender in an exchange filing on Friday, November 13.

In March 2020, during the lender's reconstruction, the instruments at the centre of the contest were written down when the bank faced mounting bad loans, governance concerns and severe financial stress that prompted regulatory intervention.

One issuance of Rs 3,000 crore carried a 9.5% coupon and had been raised in December 2016, while the second issuance of Rs 5,415 crore offered 9% interest and had been raised in October 2017 for strengthening capital buffers.

After the Reserve Bank of India's reconstruction exercise for the lender, the bank wrote down the entire outstanding value of both of those instruments in full.

Axis Trustee Services, acting for the bondholders, first challenged that write-down action before the High Court in May 2020 and sought setting aside of the decision.

In January 2023, that court ruled against the write-down and held the action to be invalid.

Appeals filed against that High Court ruling by the lender, the central bank and the Union government were later dismissed by the apex court in the judgment that is now sought to be reviewed.

In a separate disclosure on October 16 dealing with the capital effect of the ruling, the lender estimated that reinstatement of the bond principal could reduce its Common Equity Tier-1 capital ratio by approximately 250 basis points with reference to its financial position as on June 30, 2026. On a pro forma basis after giving effect to such reinstatement, its Tier-1 capital ratio was expected to remain unchanged at 14%.

It said it had sufficient capital-management flexibility to undertake additional measures if required to manage its capital position.

Trustee sought reinstatement within three days

On October 28, the trustee sought restoration of the instruments along with associated rights within three days and warned of possible contempt proceedings over alleged non-compliance with the judgment that had revived the bonds.

In its written response on October 30, the lender said it acknowledged the ruling of the apex court and was evaluating its legal implications in detail.

Coupon payments, it said, would be governed strictly by the respective bond information memorandums, including the provisions relating to applicable discretion on distributions.

With the review petition filed, reinstatement of principal, payment of interest and the capital impact on the reconstructed bank remain undecided.

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