YES Bank said the reinstatement of ₹84.15 billion of Additional Tier 1 bonds could reduce its Common Equity Tier 1 ratio by about 250 basis points after the Supreme Court dismissed appeals challenging the write-down of the bonds in March 2020.

In a disclosure to stock exchanges on Friday, the bank said the estimated pro forma impact on its CET1 ratio, including profits, was 250 basis points as of June 30, 2026. Its Tier 1 capital ratio would remain unchanged at 14.0% on a pro forma basis, it said.

The Supreme Court on Thursday upheld the Bombay High Court’s January 20, 2023, judgement setting aside the write-down of the AT1 bonds. It dismissed appeals filed by YES Bank, the Reserve Bank of India and the Union government.

The court held that the bank’s administrator lacked the authority to write down the bonds because the final reconstruction scheme, notified on March 13, 2020, omitted a provision for their write-down. It also ruled that the administrator could not exercise a power reserved for the RBI under the applicable capital regulations.

The court said annual coupon payments must remain unaffected by the outcome of the appeals and be made in accordance with the bonds’ information memoranda. 

YES Bank said it was examining the judgement and evaluating its legal options. The bank added that it had access to capital-management measures and retained the flexibility to take additional capital actions as appropriate.