Yes Bank Bondholders Seek SC Action After Winning Case
Yes Bank AT-1 bondholders have approached the Supreme Court seeking enforcement of its judgment restoring Rs 8,415 crore in written-off bonds
Yes Bank's Additional Tier-1 (AT-1) bondholders have escalated their dispute with the lender, seeking enforcement of the Supreme Court's judgment restoring Rs 8,415 crore of bonds written off during the bank's 2020 reconstruction. Axis Trustee Services, representing the investors, has filed a contempt petition against Yes Bank and certain officials and directors, alleging non-compliance with the court's October 15 ruling.
In a communication to bondholders, the trustee said it approached the Supreme Court on November 6 after the bank failed to provide a concrete roadmap for restoring or reactivating the securities and implementing the judgment. The petition seeks directions to enforce the ruling and reinstate the bonds.
Supreme Court Ruling Revives Bondholders' Claims
The dispute dates back to March 2020, when Yes Bank wrote off Rs 8,415 crore worth of AT-1 bonds as part of its reconstruction following a financial crisis. The decision was challenged by bondholders, leading the Bombay High Court to quash the write-off in January 2023.
On October 15, 2026, the Supreme Court dismissed appeals filed by Yes Bank, the Reserve Bank of India and the Union government, upholding the High Court's decision. The judgment revived investors' claims over the written-off instruments. The trustee had subsequently issued a notice on October 28 asking the bank to restore the bonds and complete necessary corporate actions within three working days.
Yes Bank Says It Is Examining Legal Implications
Yes Bank, in its October 30 response, said it remained committed to complying with the Supreme Court judgment and applicable law. However, the lender rejected allegations of wilful disobedience, stating that it was examining the ruling, its consequences and available legal remedies. The restoration of AT-1 bonds could have implications for the bank's capital position. Recognition of the securities would affect its capital ratios, while bondholders continue to seek clarity on reinstatement and potential coupon payments.
AT-1 bonds are high-risk debt instruments designed to absorb losses when banks face financial stress. They carry higher returns than conventional debt but can be written down or converted into equity under specified conditions. The Supreme Court ruling has revived investor hopes of recovering their holdings, but restoration does not automatically mean immediate repayment of principal. Bondholders are now seeking a clear implementation timeline, while the bank's compliance and the treatment of outstanding coupons remain under scrutiny.