The AT-1 (additional tier-I) bond holders of Yes Bank have moved the Bombay High Court for an early hearing of its petition filed late last week over write down of about Rs 8000 crore bond issued by the bank.

The Bombay High Court is believed to take up the petition on Monday itself considering its urgency, sources said.

After considering capital infusion of Rs 10,000 crore and write down of Basel III compliant AT1 Bonds aggregating to Rs 8,415 crore AT I ratio and Tier II ratio are capped at 1.5 per cent and 2 per cent respectively if CET I ratio is below regulatory requirements,” it said in a release issued on Saturday.

Following this, the Bank is expected to start normal bank operations from March 18.

The raising of fresh capital from banks, housing finance companies and write-off of AT1 bonds would take the CET 1 to 7.6 per cent (just above regulatory requirement) but will need more to survive and thrive, but without factoring in any capital release via asset strip-off and internal accruals, which will be a herculean task.

Lifting of deposit withdrawal moratorium on March 18 could open flood gates and will require a calibrated approach along with active support from the government, RBI and other banks. The reconstituted bank board too may need more turnaround experts and eminent bankers, said analysts.

Published on March 16, 2020