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Yes Bank AT1 writedown impact on mutual funds

Tue, 19 May 2026 00:00:00 +0000

In March 2020, the Reserve Bank of India’s Yes Bank rescue plan included a complete writedown of Additional Tier-1 (AT1) bonds issued by Yes Bank, causing approximately Rs 8,415 crore in losses to mutual funds and other AT1 holders. The writedown was a watershed event in Indian bond markets, demonstrating that AT1 bonds (perpetual bonds with loss-absorption features) carried real default risk despite their “regulatory capital” status.

For Indian mutual fund investors, the Yes Bank AT1 writedown caused significant NAV mark-downs in debt schemes that had invested in Yes Bank AT1 bonds. The event reshaped Indian mutual fund AT1 investment practices and led to regulatory tightening.

Yes Bank AT1 bond writedown impact on mutual funds

Tue, 12 May 2026 00:00:00 +0000

The Yes Bank AT1 bond writedown of March 2020 was a regulatory action by the Reserve Bank of India under a Yes Bank crisis resolution scheme that reduced the value of approximately Rs 8,415 crore of Yes Bank’s Additional Tier 1 (AT1) bonds to zero. For Indian mutual fund schemes and other institutional investors that held these instruments, the writedown caused immediate, total, and permanent NAV losses on that exposure. The episode raised fundamental questions about the risk classification, disclosure, and distribution of AT1 instruments in Indian markets and prompted the Securities and Exchange Board of India to impose new restrictions on mutual fund holdings of AT1 and Tier 2 bank bonds.