RBI releases draft circular on declaration of dividend by banks and remittance of profits to Head Office by foreign bank branches in India

The Reserve Bank of India today released the draft circular on “Declaration of dividend by banks and remittance of profits to Head Office by foreign bank branches in India”. As per the draft circular, While considering the proposal for declaration of dividends or remittance of profits, the Board of Directors or the bank’s management should consider the following:

1. The divergence in classification and provisioning for Non-Performing Assets (NPAs), including its trend, as observed under supervisory findings of the Reserve Bank or National Bank for Agriculture and Rural Development (for RRBs), as applicable.
2. Qualifications and Emphasis of Matter in the Auditors’ Report to the financial statements.
3. Current and projected capital position vis-à-vis applicable capital requirement; and
4. Long term growth plans of the bank.

Comments on the draft circular are invited from banks, market participants, and other stakeholders by January 31, 2024 by email.