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SEBI slaps Rs 25 crore fine on Yes Bank in AT-1 bonds case

New Delhi: SEBI slaps Rs 25 crore fine on Yes Bank, SEBI slaps Rs 25 crore fine on Yes Bank​Market controller Security Exchange Board of India (SEBI) has forced a punishment of Rs 25 crore on Yes Bank for supposedly mis-selling its AT-1 securities. The private moneylender said that it will move the Securities Appellate Tribunal against the SEBI’s organization.

“The Bank will incline toward an allure before the Hon’ble Securities Appellate Tribunal,” the moneylender said in an administrative documenting on Monday.

As per the SEBI request, Yes Bank Limited (YBL) and certain authorities conceived the “underhanded plan to dump the AT-1 (Additional Tier-1) bonds on their hapless clients.”

To cause institutional financial backers to buy in to more capital of YBL, the noticees contrived the arrangement to down sell the AT-1 bonds, held by the institutional financial backers, to singular financial backers, including their clients. In such manner, they featured the AT-1 bonds as acquiring high interest versus the Fixed Deposits (FDs), Sebi said.

According to the bank’s recording, Additional Tier 1 (AT-1) bonds were given in three tranches in 2013, 2016 and 2017.

Nonetheless, as a component of recreation of the bank in March 2020 under Section 45 of the Banking Regulation Act, 1949, the bank had recorded two tranches – AT-1 bonds gave in 2016 and 2017.

“The matter relating to recorded of AT-1 Bonds is sub-judice under the watchful eye of different High Court(s) and a Transfer Petition is forthcoming under the watchful eye of the Supreme Court of India,” it said. Be that as it may, meanwhile, SEBI had given a show cause notice claiming mis-selling of AT-1 bonds, it added.

AT-1 bonds are viewed as ceaseless in nature, like value shares according to the Basel III rules. The structure part of the level I capital of banks.​

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