Private-sector lender Yes Bank is yet to decide on coupon payments on its additional tier-1 (AT-1) bonds, saying it retains discretion over such payments under the terms of the instruments.
In an exchange filing on Saturday, the bank said it was evaluating the Supreme Court judgment that set aside the write-off of ₹8,415 crore worth of AT-1 bonds in March 2020 and assessing the options available to it.
The bank said it had received queries from bondholders about coupon payments on its 9 per cent AT-1 bonds, issued under an information memorandum dated October 17, 2017. The coupon payment fell due on October 18, 2026.
“Given that the Bank has not completed the evaluation and assessment, the Bank will communicate its decision, if any, on whether or not exercise of coupon discretion is required in respect of the AT-1 Bonds after it has completed the evaluation and assessment,” the bank said.
Yes Bank expects to complete its assessment in due course and make further disclosures as required under listing regulations.
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Earlier this month, the Supreme Court upheld the Bombay High Court’s decision to set aside the write-off, ruling that Yes Bank’s administrator had acted beyond his authority and contrary to the applicable regulatory framework. A Bench of Justices Dipankar Datta and Augustine George Masih declined to interfere with the High Court’s January 20, 2023, judgment, which had overturned the write-off announced on March 14, 2020. The Bench also observed that the Reserve Bank of India had remained a “mere bystander” as Yes Bank’s Common Equity Tier-1 (CET-1) ratio fell to 0.6 per cent.
The Supreme Court also directed that annual coupon payments remain unaffected by the outcome of the appeals and be made in accordance with the information memoranda. Under the terms of the bonds, however, coupon payments are discretionary and non-cumulative.
Yes Bank has said reinstating the bonds’ principal would have a pro forma impact of 250 basis points on its CET-1 ratio as of June 30, 2026, while its Tier-1 capital ratio would remain unchanged at 14 per cent.
The bank said its day-to-day operations and customer services continued without interruption across its branches and digital channels.