New Delhi, Nov 1 — Yes Bank has rejected allegations of wilful disobedience levelled by Axis Trustee Services over the delay in reinstating Additional Tier-1 (AT-1) bonds worth Rs 8,415 crore, following the Supreme Court's order setting aside their write-off.
The lender, however, faces the prospect of contempt proceedings, with Axis Trustee Services warning that it would initiate legal action if the bonds were not restored within three days of its communication to the bank.
In a stock exchange filing, Yes Bank said it had responded to the trustee's letter of October 28, which sought reinstatement of the bonds and completion of all necessary corporate actions within three days.
In its response, the bank said it did not accept the trustee's characterisation of its conduct as wilful disobedience, adding that its examination of the matter and assessment of the consequences were aimed at ensuring compliance with the Supreme Court judgment.
"The Bank does not accept the characterisation in your Letter of its conduct as wilful disobedience…The Bank's examination of these matters and evaluation of the consequences is towards compliance with the SC Judgment," Yes Bank said in its communication to Axis Trustee Services.
The dispute centres on the write-off of Rs 8,415 crore worth of AT-1 bonds in March 2020, when the bank's administrator took the decision as part of Yes Bank's reconstruction process.
Axis Trustee Services subsequently challenged the write-off before the Bombay High Court, which quashed the decision in January 2023. Yes Bank, the Reserve Bank of India (RBI) and the Union government later challenged the High Court's order before the Supreme Court.
On October 15, 2026, the Supreme Court dismissed the appeals and upheld the Bombay High Court's judgment, effectively setting aside the write-off of the bonds.
Following the verdict, Axis Trustee Services approached Yes Bank on October 28, seeking restoration of the bonds within three days and warning of contempt proceedings over alleged non-compliance with the apex court's directions.
Meanwhile, in a separate stock exchange disclosure on October 24, Yes Bank had stated that under the terms governing the AT-1 bonds, it retained the discretion to exercise its rights relating to coupon payments.