At least 100 retail investors and few hundred companies have lost Rs 10,000 crore invested in Yes Bank's Additional Tier 1 (AT-1) bonds. NDTV spoke to a few such investors who moved the Bombay High Court on Wednesday against the Reserve Bank of India's decision to scrap the AT-1 bonds. The government and the RBI are although working on restructuring of Yes Bank but one category of investors has lost out entirely. Holders of Additional Tier 1 bonds have gone to Bombay High Court seeking relief.
What are AT-1 Bonds?
AT-1 or Additional Tier 1 bonds are debt instruments which bank issues to shore up the capital buffers to meet Basel 3 norms of global banking standards. But RBI can write down these bonds in case of a restructuring of the bank as per the rules.
Archana Khetan said her husband, an investor in Yes Bank's AT1 bonds, invested nearly Rs 50 lakh in these bonds. They were told by the bank's relationship managers that this is a safer and would give them a higher interest rate.
"All my life savings are stuck in these bonds. We were not even told about the risks involved while investing," Ms Khetan told NDTV.
Similar is the story of Naveen Devnani. He works in a private finance firm. He has lost Rs 70 lakh in bonds and is worried how to secure the future of his 13-year-old child.
"I had done my due diligence before buying these bonds. Since they were sold by the bank and had a good rating I bought them. But I think we were mis-sold by the bank as we were never told about high risks involved," said Mr Devnani.
There are at least Rs 10,000 crore stuck AT1 bonds at the Yes Bank. This includes money of high net worth investors and individual retail investors. Bombay High Court will be hearing this matter on March 16.