RBI says banks must halve dividend payouts amid covid crisis

MUMBAI: The Reserve Bank of India (RBI) has asked banks to restrict dividend payouts for FY21 to 50% to conserve capital and stay resilient amid the covid-19 crisis.

“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,” the central bank said in a statement on its website on Thursday.

Cooperative banks, however, will be permitted to pay dividend on equity shares from the profits of the financial year.

RBI did not permit banks to pay any dividends in 2019-20 as well. In April last year, it had barred banks from announcing any such rewards amid an outbreak of the pandemic.

In its fourth quarterly results, HDFC Bank did not declare any dividend.

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