Home Circulars & Notifications RBI Directs Commercial Banks To Pay Up to 50% Pre-COVID Dividends on...

RBI Directs Commercial Banks To Pay Up to 50% Pre-COVID Dividends on Equity Shares

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The Reserve Bank of India (RBI) through circular dated April 22, 2021 has allowed Commercial Banks to pay dividend on equity shares from the profits for the financial year 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 percent of the amount determined as per the dividend payout ratio prescribed.

“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.” the notification said.

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.

RBI Notification:

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