Company does not hold any additional tier I bonds of Yes Bank: Shriram Transport

Shriram Transport Finance Company on Monday clarified that it does not hold any additional tier-I bonds of cash-strapped Yes Bank.

Clarifying to a news item, Shriram Transport Finance in a regulatory filing said that the company does not hold any additional tier I bonds of Yes Bank Ltd.

The filing further noted that the company had invested in Upper Tier II Bonds of Yes Bank Ltd of Rs 50 crores in the year 2010 and the same are outstanding as on date.

One of the biggest losers in case the RBI’s restructuring scheme for Yes Bank goes through will be the additional tier-I bond holders who have bets totalling to Rs 10,800 crore on the lender.

The investors in such instruments typically include mutual fund houses and bank treasuries, experts said.

“The instruments qualifying as additional tier-1 capital, issued by Yes Bank under Basel-III framework, shall stand written down permanently, in full, with effect from the appointed date,” the draft of the ‘Yes Bank Ltd Reconstruction Scheme, 2020’, said.

The Reserve Bank of India (RBI) had on Thursday imposed a moratorium on Yes Bank, capping withdrawals at Rs 50,000 per account, and superseded the board of the private sector lender with immediate effect.

Yes Bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment.

As per the RBI’s draft reconstruction scheme, State Bank of India (SBI) will pick up 49 per cent stake in Yes Bank under a government-approved bailout plan.