Supreme Court: Vacancies From Resignations under CUSAT Act Must Follow Communal Rotation  ||  Supreme Court: Forest Land Cannot Be Leased or Used For Agriculture Without Centre’s Approval  ||  Supreme Court: Gravity of Offence and Accused’s Role Must Guide Suspension of Sentence under CrPC  ||  Supreme Court: Arbitral Awards Cannot be Set Aside For Mere Legal Errors or Misreading of Evidence  ||  SC Acknowledges Child Trafficking as a Grave Reality and Issues Guidelines to Assess Victim Evidence  ||  Allahabad HC: When Parties Extend an Agreement by Conduct, The Arbitration Clause Extends Too  ||  Supreme Court: Issues of Party Capacity and Maintainability Must Be Decided by Arbitral Tribunal  ||  Supreme Court: Omissions in Chief Examination Can Be Rectified During Cross-Examination  ||  Supreme Court: Items Given by Accused to Police Are Not Section 27 Recoveries under Evidence Act  ||  Gujarat High Court: Waqf Institutions Must Pay Court Fees When Filing Disputes in State Tribunal    

Reserve Bank of India prescribes guidelines on distribution of dividend by NBFCs - (24 Jun 2021)

Banking

In order to enhance more transparency and uniformity, RBI prescribes guidelines on distribution of dividend by Non-Banking Financial Company (NBFCs). Guidelines shall be applicable to all NBFCs regulated by RBI. The guidelines will be effective for declaration of dividend from the profits of the financial year ending March 31, 2022 and onwards. NBFCs shall comply with the minimum prudential requirements to be eligible to declare dividend.

The Board of Directors shall, while considering the proposals for dividend, take into account the following aspects: (a) Supervisory findings of the Reserve Bank (National Housing Bank (NHB) for HFCs) on divergence in classification and provisioning for Non-Performing Assets (NPAs). (b) Qualifications in the Auditors’ Report to the financial statements; and (c) Long term growth plans of the NBFC. The Board shall ensure that, the total dividend proposed for the financial year does not exceed the ceilings specified in the guidelines. The NBFCs, that do not accept public funds and do not have any customer interface, no specific ceilings on dividend payout have been set in the guidelines.

The Reserve Bank shall not entertain any request for ad-hoc dispensation on declaration of dividend. The net NPA ratio shall be less than 6 per cent in each of the last three years, including as at the close of the financial year for which dividend is proposed to be declared. NBFCs shall comply with the provisions of Section 45 IC of the Reserve Bank of India Act, 1934. HFCs shall comply with the provisions of Section 29 C of The National Housing Bank Act, 1987.

Tags : DIVIDEND   NBFCS   GUIDELINES  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved