Supreme Court Strikes Down Yes Bank's ₹8,415 Crore AT-1 Bond Write-Off; Shares Slump
The Supreme Court on October 15, 2026 rejected the write-off of Yes Bank's ₹8,415 crore additional tier-1 (AT-1) bonds, and the Yes Bank AT-1 ruling sent the lender's shares sharply lower. The apex court upheld the Bombay High Court decision that quashed the write-off, and ruled that the bank must honour the bonds at prescribed coupon rates of 9.5% and 9%.
What the Court Decided
As a result, Yes Bank is liable to pay the AT-1 bond liability of ₹8,415 crore plus interest to bondholders. AT-1 bonds have no maturity date and offer higher returns with greater risk.
| Date | Development |
|---|---|
| March 14, 2020 | Yes Bank writes off ₹8,415 crore of AT-1 bonds as part of its bailout |
| January 20, 2023 | Bombay High Court quashes the write-off, saying the Administrator lacked authority to decide it |
| February 26, 2026 | Final arguments conclude before the Supreme Court, and the order is reserved |
| October 15, 2026 | Supreme Court upholds the High Court decision |
The High Court had said the Final Reconstruction Scheme issued by the Reserve Bank of India did not cover writing down or writing off AT-1 bonds. Yes Bank had earlier maintained that the write-off was valid under contractual and regulatory provisions, and said any financial liability from the verdict would be recognised in the relevant future reporting period.
Share Price Reaction
Yes Bank shares fell 10% on October 15, according to a report on the ruling, while the headline of the same report cited a 12.5% decline. The two figures reflect different points of the session, and the final close was not available at the time of writing.
| Indicator | Reading | Change / Signal |
|---|---|---|
| AT-1 liability | ₹8,415 crore plus interest | Payable to bondholders |
| Coupon rates | 9.5% and 9% | Per the ruling |
| Share price move (reports) | Down 10% to 12.5% | Sharp fall on the ruling |
Impact on Investors and SMBC
Sumitomo Mitsui Banking Corporation (SMBC) agreed in May 2025 to acquire 20% of Yes Bank, and the RBI approved a stake of up to 24.99% in August. Its total investment is pegged at about ₹17,000 crore. It is unclear whether SMBC factored in the possibility of this liability, should the Supreme Court uphold the Bombay High Court decision.
Market and Sector Impact
The ruling returns a large sum to AT-1 bondholders and is likely to draw attention to the legal basis for writing down such instruments during bank resolutions. The financial effect on Yes Bank depends on the quantum of interest payable and how the bank provides for the liability.
What to Watch
Track Yes Bank's disclosures on how and when it will recognise and pay the liability, any statement from SMBC, RBI or the government on the ruling, and whether a review petition is filed.