Supreme Court backs quashing of Yes Bank's ₹8,415-crore AT1 write-off

The Supreme Court has affirmed the Bombay High Court's ruling that quashed Yes Bank's ₹8,415-crore write-off of AT1 (Additional Tier 1) bonds, determining that the bank's administrator did not possess the necessary legal powers to implement the measure.

The judgment centers on the question of administrative authority and the proper legal procedures required for such substantial financial actions. The court found that the administrator's decision to write down the bonds lacked adequate legal grounding, thereby invalidating the action taken during the bank's resolution process.

AT1 bonds are a form of subordinated debt that banks use to meet capital requirements. The write-off had impacted numerous investors who held these securities, making it a matter of significant consequence for Yes Bank's stakeholders and the broader financial markets.

This Supreme Court confirmation of the high court's decision represents a significant development in Yes Bank's ongoing regulatory proceedings and may have implications for how financial crises are managed in India's banking sector. The ruling emphasizes the importance of adherence to established legal frameworks when taking major financial decisions affecting depositors and investors.