SEBI fines Rana Kapoor Rs 2 Crore in the Yes Bank AT-1 Bond case

Tags: Economy/Finance Person in news

The Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs 2 crore on the former Yes Bank managing director and chief executive officer, Rana Kapoor, in the tier-I bond mis-selling or AT-1 case involving the private lender on 7 September 2022.


Why was it fined ?

  • Yes Bank was found guilty by SEBI of selling the AT-1 bonds as Super FD (Fixed Deposit ) to the customer promising higher return and safety .

Penalty amount for others :

  • SEBI imposed a monetary penalty of Rs 25 crore on Yes Bank, Rs 1 crore on Vivek Kanwar and Rs 50 lakh each on Ashish Nasa and Jasjit Singh Banga. Kanwar was the head of Yes Bank’s private wealth management team. The other two were his team members.

What is Additional Tier-1(AT-1) Bonds ?

  • Under the Basel 3 norms the bank's regulatory capital has been divided into Tier-1 and Tier 11 capital.

Tier 1 Capital :

  • Tier 1 Capital has been subdivided into Common equity capital 1 and Additional Tier 1
  • Common equity capital consists of ordinary equity shares issued by the banks and on which banks can pay dividends.
  • Additional Tier 1 capital consists of perpetual bonds which have no maturity date and carry interest rates.
  •  It is risky in the sense that if the bank's capital ratio falls below a minimum prescribed level then the banks can stop paying interest or cancel the bonds causing loss to the depositors.
  • This what ultimately happened to the yes bank investor who bought these AT-1 bonds sold as Super FD by the bank .The Yes Bank stopped paying interest on these bonds and ultimately it was written off when the bank faced financial crisis.
  • Tier 11 capital consists of unsecured subordinated debts with a maturity of at least five years.



  • Securities Exchange Board of India (SEBI) was set up on 12 April 1988 and it was given statutory status by the SEBI Act 1992 on 30 January 1992.It comes under the Ministry of Finance, Government of India.
  • It is the regulator of the Capital market and Commodities market in India.
  • The first SEBI chairman was Dr S A Dave (1988-90)
  • Madhabi Puri Buch is the current and 10th Chairperson of the SEBI.
  • Headquarters: Mumbai

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