May 23, 2024

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Public Sector Banks May Exceed Rs 15,000 Crore In Dividend Payout For FY24 | Economy News

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New Delhi: Public sector banks (PSBs) are expected to pay a dividend exceeding Rs 15,000 crore for the financial year ending March 2024, fueled by enhanced profitability, as per sources. During the initial three quarters of the present fiscal year, the combined profit of all 12 PSBs amounted to Rs 98,000 crore which is merely Rs 7,000 crore less than their total profit for the entire fiscal year of FY23.

During FY23, PSBs achieved their highest-ever combined net profit of Rs 1.05 lakh crore, surpassing the Rs 66,539.98 crore earned in the fiscal year 2021-22. Consequently, the government received a dividend of Rs 13,804 crore, marking a 58 per cent increase from the Rs 8,718 crore paid out in the previous fiscal year. (Also Read: RBI Initiates Special Audits For IIFL Finance, JM Financial Over Regulatory Breaches)

The profit in the current financial year is expected to exceed that of the previous year. Hence, the dividend payout to the government will also be higher, as per the sources. Going by the past record, the dividend payout for FY24 should be in excess of Rs 15,000 crore, they added. (Also Read: Over 447 Million Dollars In Funding Raised By 22 Indian Startups Last Week)

Earlier in January, the Reserve Bank, in its draft guidelines, proposed to allow banks having net non-performing assets (NPAs) ratio of less than 6 per cent to declare dividends. As per the prevailing norms last updated in 2005, banks need to have an NNPA ratio of up to 7 per cent to become eligible for declaration of dividends.

The central bank has proposed that the new guidelines should come into effect from FY25 onwards. The draft lays down directions that need to be followed by banks' boards while considering proposals of dividend payouts, which include consideration on divergence in classification and provisioning for NPAs as well.

A commercial bank should have a minimum total capital adequacy of 11.5 per cent to be eligible for declaring dividends, the circular said. (With inputs from PTI)