Banking
SC Rules Against Yes Bank's Rs 8,415 Crore AT1 Bond Write-Off
16 October 2026 · The Economic Times
The Supreme Court held that the Yes Bank administrator lacked the power to write down AT1 bonds that were not part of the reconstruction scheme, ruling in favour of bondholders. Yes Bank is now liable to pay Rs 8,415 crore plus interest on these bonds.
Points to Remember
- The bench of Justices Dipankar Datta and Augustine George Masih upheld the Bombay High Court's view that the administrator had no power to write down AT1 bonds outside the restructuring scheme.
- Court held a power not specifically conferred cannot be vested through a general, omnibus savings clause; ruled against Yes Bank and the administrator.
- Dispute arose from the March 2020 RBI-orchestrated bailout of Yes Bank, where AT1 bonds were written down as part of the revival package.
- Yes Bank is liable to pay Rs 8,415 crore plus interest to AT1 bondholders.
- Yes Bank shares fell 14.53% to ₹18.12 after the ruling; AT1 bonds are perpetual, high-yield but riskiest fixed-income instruments, written off or converted to equity when a bank's capital erodes.
Why it matters
This ruling reinforces that AT1 bond write-offs need clear legal authority, so questions may arise on bondholder rights and the bank's liability of over Rs 8,415 crore plus interest, which affects Yes Bank's financials and investor sentiment.
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