Yes Bank has moved the Supreme Court seeking a review of the 15 October judgment that set aside the lender’s write-down of Rs 8,415 crore of its additional tier-1 bonds.

The review petition comes days after Axis Trustee Services, acting on behalf of the bondholders, filed a contempt petition in the Supreme Court alleging the lender's failure to provide a "concrete roadmap" for restoring the bonds and implementing the court's judgment.

In a notice dated 28 October, Axis Trustee Services asked Yes Bank’s managing director and board to restore the bonds to their status before the March 2020 write-down.

Last month, the SC upheld a Bombay High Court ruling setting aside the write-off of its AT-1 bonds.

Yes Bank, in which Japan's Sumitomo Mitsui Banking Corporation (SMBC) now holds a 24% stake, was declared insolvent six years ago as bad loans mounted. The Reserve Bank of India (RBI) got in a consortium of lenders, led by the State Bank of India (SBI), to bail out the private sector bank.

As part of the restructuring, the bank’s administrator wrote off the AT-1 bonds worth Rs 8,415 crore in March 2020.

On 15 October, the SC ruled that the write-off was “impermissible”. It said that the bank’s administrator had acted under the "erroneous impression" that he retained the power to write down the bonds after the restructuring scheme was finalised.

AT1 bonds are high-risk debt instruments, offering higher coupon rates, and issued by banks to strengthen their core capital base. They do not have a maturity date but the bank can buy them back via a call option. 

If the bank's core capital falls dangerously low, these bonds can be converted into equity shares or written off entirely.