New Delhi, October 15, 2026 (Yes Punjab News)
The Supreme Court on Thursday upheld a Bombay High Court ruling that invalidated the write-down of Yes Bank’s Additional Tier-1 (AT1) bonds, providing relief to investors affected by the lender’s 2020 rescue exercise.
A Bench comprising Justices Dipankar Datta and Augustine George Masih dismissed appeals filed by Yes Bank, the Reserve Bank of India (RBI) and the government, affirming the High Court’s January 2023 decision that had struck down the extinguishment of AT1 bonds worth Rs 8,415 crore.
The verdict brings a prolonged legal battle over the treatment of AT1 bondholders during Yes Bank’s reconstruction to a close. It comes nearly five months after the apex court reserved its judgment following detailed submissions from regulators, the government, the lender and investor groups.
The dispute dates back to March 2020, when Yes Bank faced mounting financial stress amid deteriorating asset quality and a sharp decline in depositor confidence.
In response, the RBI superseded the bank’s board and placed the lender under a moratorium, paving the way for a government-approved reconstruction scheme backed by fresh capital from a consortium led by the State Bank of India.
As part of the rescue package, the bank’s administrator ordered a complete write-down of AT1 bonds worth Rs 8,415 crore.
AT1 instruments are designed to absorb losses during periods of financial distress and may be written down when specified contractual and regulatory triggers are met.
A key question before the Supreme Court was whether the decision to extinguish the bonds derived its authority from the reconstruction scheme itself or from the RBI’s regulatory framework and the contractual provisions governing the securities.
During the hearings, the court examined the legal framework governing banking restructurings, including the circumstances under which a bank can be considered fully reconstructed under Section 45 of the Banking Regulation Act.
The Bench also deliberated on whether a non-viability trigger for writing down AT1 bonds could operate independently or had to be linked to the completion of the reconstruction process.
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