Unveiling Yes Bank’s Controversial Real Estate Deal with Reliance Infra
In March 2021, Yes Bank and Reliance Infrastructure inked a unique debt-asset swap deal, raising questions about the true nature of the transaction and its implications for debt recovery practices.
Yes BankReliance InfrastructureDebtasset SwapNonperforming AssetsReal EstateReal EstateJul 10, 2025
According to a report by The Wire, on March 31, 2021, Yes Bank signed an agreement to acquire the head office property of Reliance Infra in Mumbai in exchange for settling ₹12 billion (₹1,200 crore) of Reliance Infra’s non-performing loan. The property, encompassing 15,514 square metres of land and a 34,361 square metre building, was valued at approximately ₹11.75 billion, with stamp duty adding ₹350 million, bringing the total to about ₹12.1 billion. This transaction was documented through a registered conveyance/sales deed (BDR 17/4656/2021).
However, the unusual aspect of the deal, as highlighted by The Wire, was a simultaneous, separately registered option agreement (BDR 17/4657/2021) between Reliance Infra and Yes Bank. This agreement granted Reliance Infra the right to buy back the acquired property from Yes Bank at any point within a nine-year period. This deviates significantly from the typical banking practice where assets acquired in debt settlements are usually liquidated promptly to offset bad loans.
Critics, as noted by The Wire, argue that this arrangement allowed Reliance Infra to keep control over a prime real estate asset for up to nine years, effectively shielding it from other creditors, while Yes Bank appeared to function as a custodian. Further concerns were raised by restrictive clauses in the option agreement, which stipulated that the buyback right would be nullified if the control of Reliance Infra changed from the existing promoters or if the option holder ceased to be a wholly-owned subsidiary of Reliance Infra. This suggested a greater interest from Reliance Infra’s promoters in the property’s repurchase than the corporate entity itself, which originally defaulted on the debt.
The unique nature of this option agreement was reportedly not disclosed at the time the debt-asset swap was widely reported, leading to questions about the transparency and genuineness of the sale.
More recently, in June 2025, a separate development saw Reliance Infrastructure’s wholly-owned subsidiary, JR Toll Road Private Ltd (JRTR), fully settle a debt of ₹273 crore (including interest) with Yes Bank. Reliance Infrastructure clarified in regulatory filings that this settlement also discharged its obligations as a corporate guarantor for the loan, and reiterated that Yes Bank holds no shares in Reliance Infrastructure and is neither a related party nor part of the promoter group. This recent settlement addresses a different financial obligation from the 2021 property swap.
The initial property deal, as analyzed by The Wire, continues to be cited as an example of a complex financial arrangement that provided unique flexibility to a debtor while raising questions about the standard recovery practices in the banking sector.
Frequently Asked Questions
What was the main deal between Yes Bank and Reliance Infrastructure in March 2021?
Yes Bank agreed to acquire the head office property of Reliance Infrastructure in Mumbai in exchange for settling ₹12 billion of Reliance Infra’s non-performing loan.
What was the unique aspect of the deal?
A simultaneous option agreement granted Reliance Infra the right to buy back the property from Yes Bank within a nine-year period.
Why did the option agreement raise concerns?
It allowed Reliance Infra to keep control over a prime real estate asset, effectively shielding it from other creditors, while Yes Bank appeared to function as a custodian.
What recent development has been reported regarding Reliance Infrastructure?
In June 2025, JR Toll Road Private Ltd, a wholly-owned subsidiary of Reliance Infrastructure, fully settled a debt of ₹273 crore with Yes Bank.
What questions does this deal raise about banking practices?
The deal raises questions about transparency and the genuineness of the sale, as well as the standard recovery practices in the banking sector.
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