Summary:
Yes Bank faces fresh demands to restore ₹8,415 crore of AT1 bonds written off in 2020 after the Supreme Court overturned the cancellation. The dispute raises questions about unpaid coupons, regulatory capital, accounting treatment and the bank’s next steps.
Yes Bank Ltd (NSE: YESBANK, BSE: 532648) is once again facing pressure from bondholders who are demanding the restoration of ₹8,415 crore worth of Additional Tier-1 (AT1) bonds that were written off during its 2020 restructuring. This follows the Supreme Court’s ruling on 15 October 2026, which overturned the write-off, throwing into doubt the bank’s capital position and the coupon payments still to come.
Why are Yes Bank bondholders asking for ₹8,415 crore?
The Yes Bank AT1 Bond Holders Association had, on November 3, 2026, sought a time-bound restoration plan from the bank.
The association has given Yes Bank three calendar days to explain how it will make the bonds whole and address the coupon payments still due.
On October 28, Axis Trustee Services Ltd had asked the bank to reinstate the securities in its records, reverse their write-off with depositories and allow trading.
The association also asked to be represented at the bondholders' meeting on Nov. 16, when restoration, coupon payments and enforcement measures are expected to be discussed.
The row dates back to March 2020, when ₹8,415 crore of AT1 bonds were written off in the restructuring of Yes Bank.
What did the Supreme Court decide?
On 15 October 2026, the Supreme Court upheld the January 2023 judgment of the Bombay High Court and quashed the AT1 bond write-off.
The securities in question are ₹3,000 crore issued in December 2016 and ₹5,415 crore issued in October 2017.
The court held that the administrator did not have the power to cancel the bonds after the reconstruction scheme was in operation.
But the verdict does not necessarily mean an immediate cash repayment of ₹8,415 crore.
AT1 bonds are perpetual securities that banks use to boost regulatory capital. Their interest payments, called coupons, are attached to terms set out in a contract.
Yes Bank has said the bond terms allow coupon payments to be at the discretion of the bank. The financial implications are still being worked out.Great question. The answer is no, you can’t.
Yes Bank Q2FY27 Results: Profit Rises 65% YoY
Yes Bank’s operating performance improved in the September 2026 quarter despite the legal tussle.
| Financial indicator | Q2FY27 |
| Net profit | Rs 1,080 crore |
| Profit growth | YoY +65% |
| Net Interest Income | 2,822 crore |
| NII growth | +22.7% YoY |
| Operating profit | Rs 1,678 cr |
| Deposits | 3,54,004 crore |
| Advances | ₹3,09,510 crores |
| Gross NPA ratio | 1.2% |
Deposits grew 19.5% y-o-y, and advances climbed 23.7%.
But the earnings reported don’t reflect the financial impact of the Supreme Court ruling.
Based on indicative pro forma calculations done by the bank, the reported profit would have been a net loss of ₹5,217 crore in Q2FY27 if the estimated impact was recognised.
Why Yes Bank Shares Crashed After AT1 Decision?
Yes Bank shares tumbled 14.43% to ₹18.15 on October 15, 2026, post Supreme Court verdict.
The selling continued, with worries about the possible effect on the bank’s capital.
The stock fell another 1.22% on November 3 to Rs 15.38 on the NSE against Rs 15.57 earlier. The trading volume was around 16.15 crore shares.
The bank estimates that restoring the AT1 principal could reduce its Common Equity Tier-1 (CET1) ratio by around 250 basis points, while its overall Tier-1 ratio would stay the same on a pro forma basis.
The next steps will depend on the bank's implementation plan, the treatment of unpaid coupons and the outcome of the bondholders' meeting on Nov. 16. Those decisions will determine the final accounting and capital ramifications of the six-year dispute.
