Sebi imposes Rs 25 cr penalty on Yes Bank in AT1 bonds case

The Securities and Exchange Board of India (Sebi) on 12 April 2021 imposed a penalty of Rs 25 crore on Yes Bank under Section 15 HA of SEBI Act, 1992 for the alleged mis-selling of AT-1 bonds in the secondary market.

Yes Bank had issued Additional Tier 1 (AT-1) bonds in three tranches (issued in the year 2013, 2016 and 2017) in compliance with the applicable regulations. Pursuant to the reconstruction of the bank in March 2020 under section 45 of the Banking Regulation Act, 1949, the Yes Bank had had written down two tranches, i.e., AT-1 bonds issued in 2016 and 2017; in due compliance with the RBI Regulations and the relevant provisions in the Information Memorandum(s) for the said AT-1 bonds.

The matter pertaining to written down of AT-1 bonds is sub-judice before various High Court(s) and a Transfer Petition is pending before the Supreme Court of India. However, in the meantime, Sebi issued a Show Cause Notice alleging mis-selling of AT-1 bonds. Hence, the market regulator imposed a penalty of Rs 25 crore against the bank under Section 15 HA of SEBI Act, 1992 for the alleged mis-selling of AT-1 bonds in the secondary market.

Yes Bank shall be preferring an appeal before the Securities Appellate Tribunal. The announcement was made after market hours yesterday, 12 April 2021.

Yes Bank's net profit grew by 16.5% to Rs 150.71 crore in Q3 December 2020 from Rs 129.37 crore in Q2 September 2020. The bank's total income grew by 9.5% to Rs 6,518.37 crore in Q3 FY21 from Rs 5,952.14 crore in Q2 FY21.

Yes Bank is a full service commercial bank providing a complete range of products, services and technology driven digital offerings, catering to corporate, MSME & retail customers.

Shares of Yes Bank rose 1.73% to Rs 14.70 on BSE.

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