India’s Supreme Court on Oct. 15 dismissed appeals by YES BANK, the Reserve Bank of India and the Union of India, leaving the ₹8,415 crore bond write-down reversal intact while coupon treatment remains unsettled.
The dismissal left in place a Bombay High Court ruling that set aside the 2020 write-down. The Supreme Court said the final reconstruction scheme did not specifically authorize the move. A clause allowing it appeared in an earlier draft but was removed from the final scheme after investor objections. The court also said the bank’s Administrator lacked authority to make a write-down decision reserved to the Reserve Bank of India.
The court’s order preserved the annual coupon rates and directed YES BANK to follow the terms in each issue’s Information Memorandum. The bank’s Basel III disclosures classify the 9% and 9.5% coupons as fully discretionary and non-cumulative. The judgment did not set a payment timetable or total for past coupons, or explain how those terms apply to the period when the bonds were written down.
Bondholders told Reuters they had not received the 9% coupon due Oct. 18, 2026, on the 2017 issue and asked trustee Axis Trustee Services to seek confirmation from YES BANK. Reuters, citing two people familiar with the matter, reported that the bank was unlikely to pay coupons due in 2026; one source said it was preparing to seek a review. In an Oct. 16, 2026, exchange filing, YES BANK said it was evaluating legal options.
At an Oct. 19, 2026, earnings call, Chief Financial Officer Niranjan Banodkar said the bank had not decided how to restore the securities or resolve the related coupon payments.
The write-down covered two perpetual Additional Tier 1 (AT1) issues: ₹3,000 crore issued Dec. 23, 2016, with a 9.5% annual coupon, and ₹5,415 crore issued Oct. 18, 2017, with a 9% coupon. The Central Government imposed a moratorium on YES BANK on March 5, 2020; the reconstruction scheme took effect March 13, and the Administrator wrote down the bonds the following day. AT1 securities are perpetual bank-capital instruments designed to absorb losses during financial distress. The court described the bonds as high-risk and said YES BANK offered them to individual investors, although the RBI framework specified institutional investors.
If principal is reinstated, YES BANK’s Oct. 16 filing estimated a roughly 250-basis-point reduction in its Common Equity Tier 1 (CET1) ratio, using June 30, 2026, figures. The filing said the pro forma Tier 1 ratio would remain at 14.0%. On Oct. 19, management gave a later indicative CET1 impact of about 240 basis points, based on Sept. 30, 2026, figures.
