New Delhi, March 9 (IANS): Bondholders with exposure to Yes Bank's additional tier-1 securities have approached the Bombay High Court against a decision to write down their investments in the struggling bank as part of a draft rescue plan, sources privy to the development said.

Under the draft resolution plan for Yes Bank given by Reserve Bank of India after superseding its board, the banking regulator has capped deposits withdrawals at Rs 50,000 and appointed an administrator. It has also proposed to write off Rs 8,400 crore worth AT1 bonds on the lender's balancesheet while retaining equity.

Sources said that peeved at this decision, Axis and Nippon India Mutual Fund Trustees have moved the court to seek relief. However, no confirmation has come from the funds over the move.

According to an ICRA report, 16 Indian banks have Rs 93,669 crore worth AT1 bonds outstanding. But the development in case of Yes Bank has triggered a debate about the seniority of the AT1 bondholders over equity investors.

But RBI is within its powers to write down AT1 bonds under Basel III norms.