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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Declaration of dividends by banks

22-Apr-2021 | RBI/2021-2022/23 DOR.ACC.REC.7/21.02.067/2021-22

RBI vide circular DOR.BP.BC.No.29/21.02.067/2020-21 dated December 4, 2020 decided that banks shall not make any dividend payment on equity shares from the profits pertaining to the financial year ended March 31, 2020 due to COVID-19. Now, due to second wave of COVID-19 in the country, RBI has decided to review the dividend declaration norms for the year ended March 31, 2021 as below- 1. Commercial Banks- 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 50% of the amount determined as per the dividend payout ratio prescribed in circular DBOD.NO.BP.BC.88/ 21.02.067/2004-05 dated May 4, 2005. 2. Cooperative Banks- 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. 3. General- All banks shall continue to meet the applicable minimum regulatory capital requirements after dividend payment.

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