MUMBAI: Markets regulator Sebi on Wednesday imposed a Rs 2-crore fine on Rana Kapoor, former MD of Yes Bank, for palming off additional tier-1 (AT1) bonds to some of the bank’s wealth management clients, telling them that these were better than bank fixed deposits. In 2020, when Yes Bank was restructured, the RBI had extinguished all AT1 bonds that the bank had issued.
Sebi investigations found that 1,346 individual investors had invested approximately Rs 679 crore in Yes Bank’s AT1 bonds. Out of these, 1,311 investors were existing customers of the bank who had invested approximately Rs 663 crore in the instruments. Of these, 277 of Yes Bank’s customers prematurely closed FDs and reinvested about Rs 80 crore in AT1 bonds, which were subsequently written down by the RBI.
After those clients lost their investments, some had approached Sebi, complaining how a handful of Yes Bank’s employees had sold those bonds to them in the garb of ‘super FDs’.
Sebi investigations found that 1,346 individual investors had invested approximately Rs 679 crore in Yes Bank’s AT1 bonds. Out of these, 1,311 investors were existing customers of the bank who had invested approximately Rs 663 crore in the instruments. Of these, 277 of Yes Bank’s customers prematurely closed FDs and reinvested about Rs 80 crore in AT1 bonds, which were subsequently written down by the RBI.
After those clients lost their investments, some had approached Sebi, complaining how a handful of Yes Bank’s employees had sold those bonds to them in the garb of ‘super FDs’.