Yes Bank's ₹281.44 Cr Bank Guarantee Invoked by DoT Amid Borrower Insolvency
Yes Bank's ₹281.44 crore in Bank Guarantees, issued in 2018 for a borrower's spectrum payments, have been invoked by the Department of Telecommunications. The borrower is under insolvency proceedings, and the bank is assessing its response.
While the amount is significant, the bank has existing provisions and the borrower is already in insolvency, which may mitigate the immediate financial impact. However, it adds uncertainty and potential for further legal processes.
The invocation of bank guarantees, even with existing provisions and ongoing insolvency proceedings, represents a negative development for the bank as it signifies a potential financial claim.
Yes Bank Limited (YBL) has been informed by the Department of Telecommunications (DoT) about the invocation of Bank Guarantees (BGs) totaling ₹281.44 crores. These BGs were issued in 2018 on behalf of a borrower to secure their deferred annual spectrum payment obligations.
The borrower is currently undergoing a corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, with a Resolution Professional (RP) managing the affairs since 2018. Yes Bank's claim for the BG amount has already been admitted in the ongoing insolvency proceedings.
The DoT invoked the BGs via a letter dated August 14, 2026. The Bank is currently evaluating its course of action in consultation with legal advisors in light of the ongoing insolvency proceedings.
As the net exposure, after accounting for existing provisions, exceeds the materiality threshold, this disclosure is being made under Regulation 30 of the SEBI Listing Regulations. The information is also available on the Bank's website.
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