From The Economic Times · PTI · · 2m
Yes Bank seeks Supreme Court review of bond write-off order
Yes Bank moves Supreme Court to review order quashing Rs 8,415 cr AT-1 bonds write-off.
In brief
Yes Bank moves Supreme Court to review order quashing Rs 8,415 cr AT-1 bonds write-off. Yes Bank has filed for Supreme Court review of a Bombay High Court order that quashed its administrator's decision to write off Rs 8,415 crore of Additional Tier 1 bonds in March 2020. Originally reported by The Economic Times.
Yes Bank moves Supreme Court
Yes Bank has filed a petition with the Supreme Court to review an order from October 15 that upheld a Bombay High Court ruling quashing the bank's decision to write off Additional Tier 1 bonds.
AT-1 bonds write-off decision
The bank's administrator wrote off Additional Tier 1 bonds worth Rs 8,415 crore on March 14, 2020, after the Centre imposed a moratorium on Yes Bank under section 45 of the Banking Regulation Act, 1949.
Bombay High Court ruling
The Bombay High Court quashed the write-off decision on January 20, 2023, stating the administrator lacked authority to write off the bonds without specific provisions in the reconstruction scheme.
Supreme Court's concerns
The Supreme Court noted the RBI allowed Yes Bank's CET1 ratio to drop to 0.6 per cent while the bank operated in a clandestine manner, raising concerns about investor fairness.
RBI's role questioned
The Supreme Court criticized the RBI for being a mere bystander during Yes Bank's financial decline, which led to criminal prosecutions against bank personnel.
High court's order
The high court held the final reconstruction scheme did not include writing down AT-1 bonds and had invited objections to the write-off decision.
Current legal status
The Supreme Court order is in abeyance, allowing the RBI and Yes Bank to appeal against the Bombay High Court's decision.
AT-1 bonds explained
Additional Tier 1 bonds are perpetual bonds issued by banks to increase capital, riskier than traditional bonds with higher interest rates.
Next steps
Yes Bank seeks Supreme Court review of the October 15 order to challenge the Bombay High Court's quashing of the bond write-off decision.
At a glance
Yes Bank has filed for Supreme Court review of a Bombay High Court order that quashed its administrator's decision to write off Rs 8,415 crore of Additional Tier 1 bonds in March 2020.
