Banks may pay the dividend on equity shares from the profits: RBI
While allowing banks to pay dividends on equity shares, it has been decided to review the dividend declaration norms for the year ended March 31, 2021-RBI
New Delhi: In view of the continuing uncertainty caused by the ongoing second wave of COVID-19 in the country, it is crucial that banks remain resilient and proactively raise and conserve capital as a bulwark against unexpected losses. Therefore, while allowing banks to pay dividends on equity shares, it has been decided to review the dividend declaration norms for the year ended March 31, 2021, as below.
Commercial Banks
In partial modification of the instructions contained in circular DBOD.NO.BP.BC.88/21.02.067/2004-05 dated May 4, 2005, banks may pay dividend on equity shares from the profits for the financial year ended March 31, 2021, subject to the quantum of dividend being not more than fifty percent of the amount determined as per the dividend payout ratio prescribed in paragraph 4 of the said circular. Other instructions in the circular dated May 4, 2005 shall remain unchanged.
Cooperative Banks
Cooperative banks shall be permitted to pay dividend on equity shares from the profits of the financial year ended March 31, 2021 as per the extant instructions.
General
All banks shall continue to meet the applicable minimum regulatory capital requirements after dividend payment. While declaring dividend on equity shares, it shall be the responsibility of the Board of Directors to inter-alia consider the current and projected capital position of the bank vis-à-vis the applicable capital requirements and the adequacy of provisions, taking into account the economic environment and the outlook for profitability.
Read Also : SJVN bids farewell to Smt. Geeta Kapur, CMD and Director (Personnel)News Must Read
- SJVN bids farewell to Smt. Geeta Kapur, CMD and Director (Personnel)
- Nilendu Kumar Singh assumes charge of CMD, CCL
- IndianOil Q4 Results: Profit plunges 52% YoY to Rs 4,838 crore
- REC Limited declares financial results, records highest ever annual net profit
- NHPC Limited to collaborate with Norwegian company
- NTPC Group installed capacity crosses 76GW solar power mark
- RITES completes glorious 50 years
- THDC and UJVNL Joint Venture, TUECO inks MoU with Nagar Nigam Haridwar
- Government Accords 'Navratna' Status to IREDA
- EIL and Mongol Refinery resumed external construction activities at Mongol Refinery Project site