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YES Bank Crisis: Axis Trustee Services Limited approaches Bombay HC against RBI’s proposed restructuring plan

Bar & Bench

In the wake of the YES Bank crisis, Axis Trustee Service Limited (ATSL) has approached the Bombay High Court challenging the Reserve Bank of India’s (RBI) proposed reconstruction scheme.

As part of the scheme, the RBI had proposed a move to write down YES Bank’s Additional Tier 1 bonds (AT-1 Bonds) that were outstanding as on March 5. ATSL, a debenture trustee of YES Bank, has claimed that the RBI ought not be taken without giving it an opportunity to be heard.

The RBI had called for objections to the proposing restructuring plan to be submitted by March 9. Although ATSL submitted its objections and suggestions, it is apprehended that the scheme may be notified without hearing them out.

The matter was mentioned before the Division Bench of Justices KK Tated and Sarang Kotwal on Monday. The Bench had directed the petitioners to send the Union of India as well the RBI a notice that the petition had been filed. It also directed that the matter be heard on Wednesday, March 11.

The notice sent on behalf of ATSL states,

"In view of the fact that the matter is sub-judice, you are requested not to precipitate any action to the prejudice of the AT-1 Bond Holders."

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