YES Bank crisis: Mutual fund industry stares at Rs 3,000-crore hole

Nippon India's schemes saw maximum impact following perpetual bond write-offs

The mutual fund (MF) industry is bracing for a full write-off of YES Bank’s perpetual bonds. This is after the Reserve Bank of India’s (RBI’s) draft reconstruction scheme proposed the writing-off of additional tier-I (AT-I) capital bonds issued by the lender.

While some fund houses have already written down the exposure to YES Bank’s AT-1 bonds to zero, others are monitoring the situation.

“Such a move will lead to a sharp dip in net asset values (NAVs) of exposed schemes,” said a fund manager. As many as 29 MF schemes have debt exposure to the private lender, with majority concentrated