The Supreme Court has reserved its verdict on the ₹8,415 crore AT-1 bond write-down case after completing hearings, with the final ruling awaited.
The case stems from Yes Bank’s 2020 crisis-led reconstruction, where these high-risk bonds were written down to zero.
Yes Bank maintains the write-down was as per regulatory norms and expects no major financial impact.
Supreme Court Reserves Order on Yes Bank's ₹8,415 Cr AT-1 Bond Write-Down
The write-down set off a wave of legal challenges. Starting in 2020, bondholders filed writ petitions, civil suits, and criminal and consumer complaints across courts in India
Supreme Court Reserves Order on Yes Bank's ₹8,415 Cr AT-1 Bond Write-Down
Summary
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The Supreme Court has concluded hearing arguments in the case concerning the write-down of Yes Bank's ₹8,415 crore in Additional Tier-1 (AT-1) bonds and has reserved its order for judgment, reports stated.
The write-down took place during the private lender's government-orchestrated rescue in 2020. Yes Bank stated that any financial liability arising from the court's final verdict will be recognised in the relevant future reporting period. However, the bank does not anticipate a material financial impact, maintaining that the write-down was carried out in full compliance with applicable contractual terms and regulatory guidelines.
What Is the AT-1 Bonds Case
The case has its roots in one of the most consequential episodes in Indian banking history. On March 5, 2020, the central government imposed a moratorium on Yes Bank as the lender teetered on the brink of collapse. The Reserve Bank of India simultaneously superseded its board and appointed an administrator to manage its affairs. Within days, the government cleared the Yes Bank Reconstruction Scheme, which reconstituted the bank and paved the way for a new board.
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Acting under contractual covenants and RBI guidelines, the court-appointed administrator wrote down two tranches of AT-1 bonds, reducing their total value of ₹8,415 crore to zero, wiping out the investments of bondholders who had held them as relatively safe, yield-bearing instruments.
Legal Journey
The write-down set off a wave of legal challenges. Starting in 2020, bondholders filed writ petitions, civil suits, and criminal and consumer complaints across courts in India. While most proceedings remain pending, a batch of writ petitions before the Bombay High Court and one before the Madras High Court progressed to more advanced stages of adjudication.
The Bombay High Court eventually ruled against Yes Bank, prompting the bank, the RBI, and the central government to separately file special leave petitions before the Supreme Court challenging that judgment. Final arguments before the apex court concluded on February 26.
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Notably, two days before this development, Yes Bank reported its financial performance for the quarter ended March 31, 2026. The bank posted a standalone net profit of ₹1,068 crore, a 44% jump from ₹739 crore in the year-ago period, supported by healthy loan growth and stable asset quality. It is to be noted that the bank recorded a return on assets (ROA) of 1% for the first time since 2020, marking a significant milestone in its ongoing recovery.