Yes Bank to seek Supreme Court review of Rs 8,415 crore AT1 bond write-down verdict

Mumbai: is set to file a review petition in the Supreme Court against the apex court’s judgment upholding the Bombay High Court order that set aside the write-down of Rs 8,415 crore of Additional Tier-1 (AT1) bonds, while the Reserve Bank of India is evaluating if it wants to join the private lender to seek a review of the ruling, people familiar with the matter said.

The move would mark the next legal step for the lender after the apex court upheld the Bombay High Court judgment quashing the March 2020 write-down of the AT1 instruments issued by Yes Bank.

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The RBI, which had backed the write-down as part of the bank’s 2020 reconstruction process, is seeking legal opinion of the matter, they said.

“The bank is expected to exhaust the legal remedies available to it before taking a final call on the accounting and capital treatment of the bonds,” according to a person familiar with the matter.

Both Yes Bank and RBI did not respond to a query till press time.

The board of Yes Bank, which is scheduled to meet on October 17 to review its second quarter results, will deliberate on the matter. The Rs 8,415 crore payment will impact the bank’s core capital that is reflected in capital adequacy ratio and not its net profit.

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In an exchange disclosure, Yes Bank said it was currently reviewing the Supreme Court order and its implications and will make suitable disclosures in due course. It added that it is “examining the judgement in detail including evaluating all available legal options and suitable actions/steps going forward.”

$60 b in 6 Weeks, Rupee Defence Comes at a Cost

Kolkata: India’s foreign exchange reserves have fallen by roughly $60 billion over the past six weeks as the Reserve Bank of India (RBI) aggressively sold dollars to prop up the rupee, one of Asia’s worst-performing currencies.

On October 9, the RBI’s foreign exchange reserves stood at $726.027 billion, down from the lifetime high of $785.706 billion on September 4, official data showed. This fell by $8.578 billion in the reporting week, according to the RBI’s weekly statistical supplement.

Foreign currency assets, the largest contributor to the country’s reserves, fell by $7.142 billion in that week to $597.605 billion. Over the last six weeks, this has declined by $50.563 billion, eroding 35% of $143.596 billion the central bank had garnered between June and August through dedicated dollar mobilisation schemes cum swap window.

The depletion was largely due to dollar sales by the RBI through large public sector banks to support the rupee, which was facing headwinds in the form of higher crude oil prices, rising US yields and persistent outflow of foreign capital.

National Securities Depository Ltd (NSDL) data showed that foreign portfolio investors have withdrawn a net $26.8 billion from the local markets so far this year.

India’s gold reserves fell by $1.319 billion in the week to October 8 to $105.094 billion.