Yes Bank may face contempt action over AT1 bonds written off in 2020

what happened

Yes Bank told the exchange that Axis Trustee Services Limited, the trustee for its Additional Tier 1 bonds worth ₹8,415 crore, wants the securities reinstated and all required corporate steps completed within a three-day deadline. TradingView, which carried the disclosure, notes that the trustee's letter is dated October 28.

The trustee has warned it could bring contempt proceedings before the Supreme Court against the lender, its directors and officers if the demand is not met, accusing them of deliberately ignoring the court's judgment. The bank replied on October 30 that it is committed to the top court's ruling and the law, called the accusation baseless, and said it is still studying the judgment in detail.

The disagreement centers on bonds the lender wrote off in March 2020 during its reconstruction. The Supreme Court upheld a Bombay High Court decision that annulled that write-off, opening the door for bondholders to push for reinstatement. The trustee has also asked the NSDL and CDSL depositories to reverse the write-off entries and wants the bonds relisted on the BSE and NSE. CNBC-TV18, citing sources, said the trustee's notice is dated October 28.

why it matters

For markets, the outcome determines whether the written-off AT1 bonds return to Yes Bank's capital structure and how large its legal exposure becomes. Until the dispute is resolved, investors have to weigh both the financial consequences and the risk of court action.

market impact

Yes Bank shares: contempt threat over written-off AT1 bonds adds legal risk and pressure

• ▼Yes Bank shares pressure down — legal threat and possible restoration of written-off AT1 bonds add uncertainty

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