Supreme Court strikes down Yes Bank's ₹8,415 crore AT-1 bond write-off, rebukes RBI

The Supreme Court has invalidated Yes Bank's write-off of ₹8,415 crore in AT-1 (Additional Tier-1) bonds, holding that the bank's administrator did not possess the legal authority to take such action.

The court also delivered a sharp rebuke to the Reserve Bank of India, stating it acted as a "mere bystander" in overseeing the rescue operation. The verdict centred on the final rescue plan's omission of a critical clause that had existed in earlier versions.

The judgment underscores gaps in regulatory oversight during Yes Bank's restructuring and raises questions about the framework governing bond write-offs in financial rescues. The ruling has implications for AT-1 bond holders and the broader mechanisms used by authorities during banking sector interventions.