Axis Trustee Demands Yes Bank Restore ₹8,415 Crore AT1 Bonds
Trustee sets three-day deadline for bond reinstatement following Supreme Court ruling on write-offs.
1Legal Deadline Issued
Axis Trustee Services Ltd has formally issued a notice to Yes Bank, demanding the restoration of ₹8,415 crore in Additional Tier-1 bonds. This action follows a 15 October Supreme Court ruling that overturned the 2020 write-off. The bank now has three working days to reinstate these holdings within its official register.
2Operational Reversal Requirements
The trustee requires Yes Bank to reverse all previous write-off entries with depositories NSDL and CDSL. Furthermore, the bank must coordinate with the BSE and NSE to facilitate the resumption of trading for these instruments. Copies of this notice were sent to the RBI, Sebi, and relevant financial exchanges for regulatory oversight.
3Capital Ratio Implications
Reinstating these bonds will significantly impact Yes Bank's financial health. Management estimates that the move will reduce the Common Equity Tier-1 ratio by approximately 240 basis points. Pro forma calculations suggest the ratio would drop from 13.7% to roughly 11.4%, though the bank claims no immediate need for additional capital raising.
4Unpaid Coupon Uncertainty
Beyond the principal, the trustee is seeking clarity on multiple unpaid coupon payments. These include interest for the period between March 2020 and October 2026, as well as specific 9% and 9.5% coupons due in October and December. The bank currently maintains contractual discretion and has not confirmed if these will be paid.
5Management Stance on Timeline
During an earnings call on 19 October, CEO Vinay M. Tonse declined to provide a specific implementation timeline. CFO Niranjan Banodkar emphasized that the bank is still evaluating the legal judgment. While the trustee demands a firm schedule, the bank maintains that it is currently assessing the broader implications of the court order.
6Bondholder Association Pressure
The Yes Bank AT1 Bond Holders Association is actively lobbying the RBI, Sebi, and the finance ministry for intervention. Representing 389 individual investors, the group is pushing for accountability regarding coupon payments. They argue that the Supreme Court judgment explicitly protects annual coupons from being affected by the outcome of the bank's appeals.
7Financial Performance Context
Yes Bank recently reported a net profit of ₹1,080 crore for the July-September quarter, marking a 65% increase year-on-year. However, these results do not account for the potential liabilities stemming from the Supreme Court judgment. The bank's shares closed 1.09% lower at ₹15.45 following the latest developments in this ongoing legal dispute.
8Future Legal Escalation
Axis Trustee has scheduled a meeting for bondholders on 16 November to discuss the next steps. The trustee is actively examining further legal options should Yes Bank fail to comply with the reinstatement notice or default on coupon obligations. This situation remains a critical test for regulatory enforcement and investor rights in India.
Original article: mint - industry — Axis Trustee Demands Yes Bank Restore ₹8,415 Crore AT1 Bonds