Business

Banks not to pay further dividend from FY20 profits

New Delhi, April 17 (IANS) Banks will not be required to pay any further dividend from their profits from financial year 2019-20 as the Reserve Bank of India wants these financial institutions to conserve capital so as to deal with heightened uncertainty amid the coronavirus scare.

Announcing a raft of liquidity and regulatory easing of steps on Friday, RBI Governor Shaktikanta Das said that it is imperative that banks conserve capital to retain their capacity to support the economy and absorb losses in an environment of heightened uncertainty.

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“It has, therefore, been decided that in view of the COVID-19-related economic shock, scheduled commercial banks and cooperative banks shall not make any further dividend payouts from profits pertaining to the financial year ended March 31, 2020 until further instructions,” he said.

The banking regulator will review this forbearance on the basis of financial position of banks for the quarter ending September 30, 2020 to take a call whether dividend needs to be paid or not.

–IANS

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