Supreme Court upholds quashing of Yes Bank's ₹8,415 cr AT-1 bond write-off

New Delhi, Oct 15, 2026

The dispute dates back to March 2020, when Yes Bank wrote down AT-1 bonds worth ₹8,415 crore to zero as part ofa its rescue and reconstruction, wiping out bondholders' investments.

The Supreme Court on Thursday upheld the Bombay High Court's 2023 judgment quashing Yes Bank's decision to write off Additional Tier-1 (AT-1) bonds worth ₹8,415 crore, leaving the ruling in favour of bondholders undisturbed.

A Bench of Justices Dipankar Datta and AG Masih dismissed appeals filed by Yes Bank, the Reserve Bank of India (RBI) and the Centre challenging the high court's January 2023 judgment.

“We have decided on merits, and our answers to both the questions are in the negative. Therefore, for the reasons assigned in our judgment, we have held that we see no reason to interfere with the impugned judgment. The appeals are dismissed,” the Bench said, reported LiveLaw.

The dispute began in March 2020 when Yes Bank wrote down AT-1 bonds worth ₹8,415 crore to zero as part of its rescue and reconstruction strategy. The decision wiped out the investments of bondholders, represented by Axis Trustee Services, who challenged the decision before the Bombay High Court. 

The high court quashed the write-off in an order in January 2023, saying the private lender’s final reconstruction scheme did not contain a provision authorising it. 

Upholding the high court's order, the Supreme Court in its judgment stated, “The first [issue is], whether, in view of developments subsequent to the writing down of the AT-1 bonds, a decision on merits is unwarranted. Secondly, whether the Administrator could write down the AT-1 bonds, in the absence of a specific provision in the reconstruction scheme, and thirdly, whether the act of the Administrator in writing down the AT-1 bonds was in consonance with the Master Circular and the terms of the information memorandum of the AT-1 bonds.”

[The Business Standard]