Yes Bank AT-1 Bonds: ₹13,000 Cr Write-Off Quashed

India's Supreme Court upheld a ruling that Yes Bank cannot simply write off AT-1 bonds worth over ₹13,000 crore. This is big news for retail investors who lost money and a warning for anyone holding bank bonds today.

Here's what happened: India's Supreme Court upheld the Bombay High Court order quashing Yes Bank's 2020 write-off of Additional Tier-1 (AT-1) bonds, a decision that could expose the bank to liabilities exceeding ₹13,000 crore.. During Yes Bank's bailout in March 2020, the RBI-led rescue plan wrote off approximately ₹8,415 crore of AT-1 bonds to zero — wiping out thousands of retail investors who had been sold these instruments, often as FD alternatives.. Yes Bank shares dropped over 14% following the ruling as markets priced in the risk that the bank may now be legally required to compensate AT-1 bondholders, significantly impacting its balance sheet..

What you should do: Check your 2018–2020 investment statements — if a bank branch sold you 'perpetual bonds' or 'Basel III bonds', verify whether they were Yes Bank AT-1 bonds and consult a securities lawyer about filing a claim.. Avoid buying any bank bond labelled 'AT-1', 'perpetual', or 'Basel III tier-1' without reading the full prospectus — these can be legally written to zero and are NOT covered by the ₹5 lakh DICGC deposit insurance.. If your bank relationship manager pitches a 'high-yield bond better than FD', ask explicitly: is this an AT-1 instrument? If yes, treat it as equity-level risk, not fixed-deposit safety..

AT-1 bonds are NOT deposits — DICGC's ₹5 lakh insurance covers only savings, current, FD, and RD accounts. Bond losses are entirely uninsured, no matter which bank sells them.