The Reserve Bank of India vide its notification dated 17th March 2020 has decided that scheduled commercial banks and cooperative banks shall not make any further dividend pay-outs from profits pertaining to FY 2019-20.
This restriction shall be reassessed by the Reserve Bank based on the financial results of banks for the quarter ending September 30, 2020.
The RBI in its earlier circular dated 4th May 2005 has granted permission to banks to declare dividends, subject to compliance with the guidelines laid out in the circular, however due to uncertainty caused by COVID-19 and in order to enable banks to conserve capital so that they can retain their capacity to support the economy and absorb losses in an environment the banks have been barred from paying dividends for the fiscal year ended March 2020.
Click here to read the Notification.
