InvestorQ : Why has SEBI put a penalty of Rs.25 crore on Yes Bank? What are next steps for Yes Bank?
diksha shah made post

Why has SEBI put a penalty of Rs.25 crore on Yes Bank? What are next steps for Yes Bank?

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Arti Chavan answered.
8 months ago
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SEBI imposed a penalty of Rs.25 crore on Yes Bank for deliberate mis-selling of Additional Tier-1 bonds or AT-1 bonds to the retail customers. AT-1 bonds are perpetual bonds which are quasi equity. However, in a crisis situation it can be written off and that is what happened in Yes Bank case. Even the interest payments could be cancelled in tough times. SEBI has blamed mis-selling for the losses of many investors in Yes Bank AT-1 bonds.

One thing that will be favour Yes Bank in this case is that these bonds were largely bought by sophisticated mutual fund managers. So uninformed investment was hardly the problem. Also, the write-off decision was taken by SBI in consultation with RBI. Now, Yes Bank is under a new leadership. Yes Bank has decided to go to the SAT against the SEBI order. Since the mis-selling pertained to the old management of Yes Bank, bank may have a valid case.

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