AMFI feels that equities of Yes Bank should be written down to zero before writing down Additional Tier 1 (AT-1) bonds in the reconstruction process.
Today N S Venkatesh, CEO, AMFI said that the MF industry body has written to RBI for reviewing its recent draft on YES Bank reconstruction. The draft proposal released on March 6 includes writing down Additional Tier 1 (AT-1) bonds issued by the private bank to zero. AMFI has also taken up this issue with SEBI.
If the RBI draft becomes the norm, over Rs 2,700 crore in Basel III Compliant AT-1 Bonds have to be marked down to zero by fund houses. As on January end, over 30 schemes across 11 fund houses have exposure of over Rs 2,800 crore to YES Bank’s debt instruments and a lion’s share is in the form of AT-1 bonds.
