The stock market regulator SEBI has imposed a fine of Rs 25 crore on Yes Bank. Let’s know the whole matter …
Yes Bank (file photo)
The stock market regulator SEBI (SEBI-Securities and Exchange Board of India) has imposed a fine of Rs 25 crore on the private sector bank Yes Bank in the AT1 bond case. According to media reports, Vivek Kanwar has been fined Rs 1 crore, Ashish NASA and Jasjeet Singh Banga for Rs 50 lakhs on the same matter. SEBI has said in its order that the amount related to it will have to be deposited within 45 days. On this, experts say that there will be no significant impact on customers with this decision. However, the stock may decline. Hence, investors can suffer losses due to the fall of the stock.
What is the matter?
The case related to Yes Bank officials is related to selling AT1 bonds to investors under the guise of Super FD. Which a specific bank promises high returns and security of FD. That is why SEBI has imposed a fine in view of the case of false promise.
Let us tell you that in order to save YES Bank, in March last year, a bank consortium headed by State Bank of India (SBI) was granted bail. According to the framework of the scheme, AT1 bonds closed at Rs 8,415 crore. Many big companies and crores of investors had suffered due to this.
Subsequently, the investors accused the courts that they had sold these bonds on false assurances by the bank and hence the investors should be compensated by the bank.
The matter is going on in the Bombay High Court. Both YES Bank and RBI have so far maintained that the AT1 bond is in accordance with the Right of Basel III rules.
Apart from retail investors, institutional investors such as Indiabulls, 63 Moons Technologies have also moved courts.
What happens AT1
Experts say that it is called Tier 1 bond. These are permanent bonds with no expiry. They are also called Perpetual Bonds. These are helpful in meeting the capital requirement of banks.
RBI regulates AT1 bonds. In this, the fixed rate of interest is paid at different times. It has a higher interest rate than non-permanent bonds where it is not necessary to give back the principal to the investors. However, if the money is needed, the bond holders can sell it.
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