March 12, 2020

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Nippon India MF expresses concern over RBI’s proposal to write-down YES Bank perpetual bonds

Nippon India Mutual Fund has termed the RBI’s proposal to write-down the perpetual bonds issued by Yes BankNSE -13.02 % as unprecedented and expressed concerns about its implications on investors. The fund house, which has an exposure of over Rs 1,800 crore to Yes Bank debt, last week created segregated portfolios in its schemes. This came after the downgrade of debt instruments of Yes Bank to ‘D’, which is below investment grade, by ratings agency ICRA.

YES Bank was a week ago put under a ban, with the RBI topping store withdrawals at Rs 50,000 for every record for a month and supplanting its board.

As a major aspect of the goals plan, the RBI has suggested that the extra level 1 bonds or interminable bonds gave by the bank will be totally and for all time recorded.

In a note to speculators, Nippon India Mutual Fund said,”We have communicated our interests to RBI through the conversation discussion bringing up the negative ramifications

of the proposition to the monetary framework and to the different financial specialists.”

At the same time, the reserve house through its debenture trustee has just moved the Bombay High Court.