In the rescue process, Yes Bank’s AT1 bonds worth ₹8,415 crore were written down in full in March
Yes Bank’s total capital adequacy ratio stood at 8.5% in the March quarter, of which common equity tier-I (CET1) ratio was at 6.3% and tier-II ratio was at 2%
Private sector lender Yes Bank Ltd said the Reserve Bank of India (RBI) has temporarily disallowed it from paying interest on its tier-II bonds due on 29 June, due to its weak capital position.
In a regulatory filing on 20 June, the bank said that in terms of the information memorandum dated 25 June 2012, the interest due and unpaid amount shall be accumulated and be paid by the bank later, subject to compliance with regulatory requirements.
“We refer to our earlier communication dated 27 May 2020 wherein we had inter alia informed that as the capital to risk assets ratio (CRAR) of the bank is below regulatory requirement, the bank has filed an application with Reserve Bank of India seeking approval for payment of interest due as on 29 June 2020 for the captioned upper tier-II bonds," the bank said.
Yes Bank’s total capital adequacy ratio stood at 8.5% in the March quarter, of which common equity tier-I (CET1) ratio was at 6.3% and tier-II ratio was at 2%, after a bout of capital infusion from private and public sector lenders.
The bank added that the “Reserve Bank of India has expressed its inability to accede to the bank’s request for payment of interest due since the bank does not meet the minimum capital requirements currently". On 13 March, the government had approved a rescue plan for Yes Bank backed by State Bank of India. Under the plan, domestic investors including SBI, Housing Development Finance Corp., ICICI Bank , Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First Bank invested ₹10,000 crore into Yes Bank. In the rescue process, Yes Bank’s AT1 bonds worth ₹8,415 crore were written down in full in March.
That apart, the bank is also looking to raise up to ₹10,000 crore to bolster its capital base. It already has an approval from its board of directors to raise up to ₹15,000 crore in equity capital. Prashant Kumar, chief executive, Yes Bank, had said in May that it is looking to raise ₹10,000-12,000 crore as soon as possible through either a follow-on public offer (FPO) or right issue or qualified institutional placement (QIP).