Yes Bank debenture trustee moves HC on RBI move to write down AT-1 bonds

Mumbai: Axis Trustee Services Ltd, a debenture trustee of Yes Bank, on Monday petitioned the Bombay High Court against the Reserve Bank of India's (RBI) proposal to write-down additional tier-1 (AT1) bonds. The petition is likely to be taken up for hearing by a division bench of Justices K K Tated and S K Kotwal later this week.

The debenture trustee has sought relief against the proposal made by RBI as part of its plan to rescue the private sector lender, which has been put under a moratorium last Thursday. A day after putting it under moratorium, the RBI had come out with a draft of the SBI-led restructuring package, which entails writing-down of over Rs 8,600 crore outstanding to AT-1 bond holders.

It cited global practices adopted in the Basel framework for the move.

Inclusion of this condition has led to massive unease among the investors, which include mutual fund houses and bank treasuries.

The deadline for public comments on the draft ended on Monday evening.