The central bank states that NBFC’s net NPA ratio must be less than 6% in each of the last three years, including the end of the fiscal year in which dividends are proposed to be declared.
Also, if the net income for the period includes exceptional and / or special income / income, or if the auditor overestimates the net income, the same amount from the net income when determining the dividend payment ratio. Shall be deducted.
These guidelines comply with the draft standards issued by the Central Bank in December 2020. These guidelines are intended to actually increase the transparency and uniformity of dividend distribution by NBFC.
The NBFC receiving the deposit must maintain a capital adequacy ratio of 15% for each of the last three fiscal years, including the fiscal year in which dividends are proposed. According to the RBI, an independent primary dealer must maintain a capital adequacy ratio of 20% in the fiscal year in which dividends are proposed (all four quarters).
The central bank also sets a dividend ratio cap of 60% for primary dealers independent of the core investment company, while other NBFCs have a cap of 50%. There is no NBFC limit for not receiving deposits.
The NBFcs Board of Directors should also take into account the findings of the supervisory investigation into the divergence of the RBI. NPA Auditor’s statement regarding NBFC financial statements.
The Board of Directors must ensure that the total amount of dividends proposed does not exceed the upper limit specified in the guidelines.
A NBFC Those who do not meet the applicable requirements are eligible to declare dividends subject to a 10% cap if the NBFC meets the capital requirements for the fiscal year and the net NPA at the time of settlement is less than 4%. It may be. Year.
For primary dealers with a regulatory minimum of 15% in each of the four quarters and a capital adequacy ratio of less than 20% in any quarter, the dividend payment ratio must not exceed 33.3%.
RBI sets a maximum dividend for NBFC
https://economictimes.indiatimes.com/markets/stocks/news/rbi-prescribes-dividend-ceilings-for-nbfcs/articleshow/83813618.cms RBI sets a maximum dividend for NBFC