AT-1 bonds write-off: Yes Bank moves SC against high court ruling Yes Bank has approached the Supreme Court to appeal against a Bombay high court ruling on the write-down of additional Tier-1(AT-1) bonds worth Rs 8,415 crore. “The Bank has filed appeal(s) before the Honourable Supreme Court of India against the Judgment dated January 20, 2023 of the Honourable Bombay High Court setting aside the decision of the Bank to write down AT-1 Bonds,” a spokesperson for the lender told FE in a statement. Also read: Markets Wrap – Mon, 13 Feb ‘23: Stocks fall, rupee depreciates; Asia, Europe markets, Gold, Crude, Crypto updates In January, the Bombay high court held that there were procedural lapses in the bank’s decision to write off the bonds. The decision came as a relief to the bond investors, many of whom had lost their life’s savings in the process. “During this period, the administrator could not have taken such a policy decision as writing down the AT-1 bonds. Nor the Reserve Bank of India had authorised him to do so. The final reconstruction scheme also did not authorise the administrator to write off the AT-1 bonds,” the high court said in its order. Yes Bank’s managing director and chief executive officer Prashant Kumar had said the lender had strong legal grounds to appeal the decision. Prior to assuming his role heading the bank, Kumar had served as its administrator. In 2020, RBI superseded the bank’s board due to mounting bad loans, and appointed Kumar administrator. AT-1 bonds are unsecured, perpetual bonds that are issued to bulk up banks’ core capital base. They carry call options that enable investors to redeem them after five or 10 years. Banks issuing these bonds can skip interest payouts for a particular year or reduce the bond’s face value if their capital ratios fall below thresholds specified in their offer terms. Also read: Market Outlook: Nifty, Sensex end lower amid profit-booking; traders eye US, India CPI inflation data for cues In Yes Bank’s case, RBI had asked the administrator to write off the bonds as a part of the latter’s restructuring scheme. In its appeal to the Supreme Court, the bank has argued that its administrator had the power to fully write-down the AT-1 bonds, a person familiar with the matter said without disclosing the specific details of the petition. The RBI may reportedly choose to provide a regulator’s perspective when the petition is brought up before the apex court.
Logistics, good or bad, are driven by the states and the commerce ministry has a LEADS (Logistics Ease Across Different States) report, based on perceptions. The 2023 version was released in December. Since states are heterogenous, in the reporting, they are divided into four groups—coastal, landlocked, north-east, and UTs. States that do well are called achievers. Nomenclature matters. Thus, states that are middling aren’t called average. They are called fast movers. States that are sub-par are called aspirers. Let me highlight coastal states, since 75% of export cargo is estimated to originate from them. Among coastal states, ones that do well are Andhra Pradesh, Gujarat, Karnataka, and Tamil Nadu. The ones that lag are Goa, Odisha, and West Bengal. While India’s logistics performance may have improved over time, that’s not true of every state. Some have slipped. Most states have a state-level logistics policy, including Goa and Odisha. West Bengal, bottom of the pecking order in the coastal category, doesn’t have one. To quote from LEADS 2023, “Looking ahead, the State (West Bengal) could benefit from formulating a State Logistics Master Plan and State Logistics Policy to drive efficiency improvements and facilitate investments within the logistics sector and undertake consultation with the logistics stakeholders for educating and informing them about the initiatives State is undertaking for the development and improvement of logistics sector.”
Logistics has been talked about for a long time and India has also focused on improving performance. We are now getting some precise data on measurement and quantification. That helps.
Bibek Debroy, chairman, EAC-PM. Views are personal.