Categories: Banking

RBI allows commercial banks to pay up to 50% of pre-Covid dividends

The Reserve Bank of India (RBI) has allowed commercial banks to pay dividends on equity shares for FY21, from the profits for the fiscal ended March 31, 2021, subject to certain conditions and limits. The new notification of RBI allows commercial banks to pay dividends not more than 50 per cent of the amount determined as per the dividend payout ratio prescribed. This means that banks may pay dividends up to 50% of what they paid before the Covid scenario.

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Earlier, RBI had asked all banks not to make any dividend payment on equity shares for FY20 from the profits due to the ongoing stress and heightened uncertainty on account of Covid-19. For co-operative banks, all the restrictions on dividends have been removed and they have been permitted to pay the dividend on equity shares from the profits of the financial year ended March 31, 2021. However, RBI has also instructed all banks to continue to meet the applicable minimum regulatory capital requirements after dividend payment.

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Sumit Arora

As a team lead and current affairs writer at Adda247, I am responsible for researching and producing engaging, informative content designed to assist candidates in preparing for national and state-level competitive government exams. I specialize in crafting insightful articles that keep aspirants updated on the latest trends and developments in current affairs. With a strong emphasis on educational excellence, my goal is to equip readers with the knowledge and confidence needed to excel in their exams. Through well-researched and thoughtfully written content, I strive to guide and support candidates on their journey to success.