Supreme Court Judge Sanjay Sharma delivered the order on May 28, 2026, mandating Yes Bank to reinstate Rs 8,415 crore of additional tier‑1 bonds that were written off during its March 2020 restructuring. The bank’s board immediately issued a statement that the capital hit would be absorbed through internal accruals, fresh capital injections and its sizable deferred tax asset pool.
Crisil Ratings assessed that the impact could be absorbed without materially damaging the bank’s credit profile, noting that Sumitomo Mitsui Banking Corporation, the largest shareholder, would likely contribute fresh capital. The agency highlighted that the bank’s tier‑I capital ratio would remain around 13.7% but the pro‑forma CET‑1 ratio would dip to 11.4%, a 240‑basis‑point swing.
CFO Niranjan Banodkar explained that reinstating the AT1 principal would reduce the CET‑1 ratio by about 240 basis points on a pro‑forma basis, yet the overall capital buffer would stay comfortably above regulatory minimums. He added that the bank is reviewing its legal options and capital plans to mitigate the hit.
Managing Director and CEO Vinay Tonse, speaking on the earnings call, said, "We respect the judgment and are examining it carefully, including the options available to the bank." Tonse emphasized that the decision will not derail the bank’s growth trajectory.
The next phase involves a formal review of legal avenues and potential capital raise to offset the AT1 restoration. The bank is slated to present its revised capital strategy to the Board of Governors by the end of Q3 2026, with a follow‑up court hearing scheduled for September.