Yes Bank has rejected allegations of wilful disobedience raised by Axis Trustee Services over the delay in restoring Rs 8,415 crore worth of Additional Tier-1 (AT-1) bonds, whose write-off was recently overturned by the Supreme Court.
The dispute has escalated after Axis Trustee Services demanded that the lender reinstate the bonds within three days of its October 28 communication.
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The trustee also warned of initiating contempt proceedings if the bank failed to comply with the court's directions within the stipulated period.
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In its exchange filing, Yes Bank confirmed that it had responded to the trustee's notice but disputed the allegation of deliberate non-compliance.
The lender said its review of the legal and operational implications was intended to ensure proper implementation of the Supreme Court's judgment.
Also Read | Axis Trusteeship Sends Notice To Yes Bank After Supreme Court Judgment
Supreme Court Upholds Restoration of Rs 8,415 Crore AT-1 Bonds
The controversy dates back to March 2020, when Yes Bank's administrator wrote off AT-1 bonds worth Rs 8,415 crore as part of the bank's reconstruction exercise.
Axis Trustee Services challenged the decision before the Bombay High Court, which quashed the write-off in January 2023. Yes Bank, the Reserve Bank of India (RBI) and the Union government subsequently appealed against the ruling.
On October 15, 2026, the Supreme Court dismissed the appeals and upheld the Bombay High Court's decision, effectively setting aside the bond write-off.
Yes Bank Faces Potential Contempt Proceedings
Following the verdict, Axis Trustee Services sought restoration of the bonds and completion of the necessary corporate actions. Its three-day deadline has increased pressure on the lender to implement the judgment.
Separately, Yes Bank had stated in an October 24 exchange disclosure that it retained discretion over coupon payments under the terms governing the AT-1 instruments.
The dispute now centres on implementing the court's ruling and determining the applicable rights of bondholders.
Also Read | Yes Bank Sees No Immediate Need For Capital Raise After Supreme Court's AT1 Bond Ruling
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