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Banks must halve their dividends to conserve capital
in view of Covid: RBI
Banks could pay a maximum of 50% of dividend from their profits in 2020-21; no such restriction on
The Reserve Bank of India (RBI) on Thursday said that in order to stay resilient during the Covid-19 crisis banks
could pay a maximum of 50 percent of dividend from their profits in 2020-21.
"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.
However, there will be no such restriction on cooperative banks.
"While declaring a dividend on equity shares, it shall be the responsibility of the board of directors to inter alia
consider the current and projected capital position of the bank vis-a-vis the applicable capital requirements and the
adequacy of provisions, taking into account the economic environment and the outlook for profitability," the central