Latest News
-
Bajaj Group Stock Declares Rs. 60/Share Dividend: Buy Ahead of Record Date On 28 June? -
Rs 45/Share Dividend: Record Date In Due Course; Buy The IT Stock For Dividend Eligiblity? -
175% Dividend: TATA Group Stock Declares Q4 Results; Buy The Rekha Jhunjhunwala Portfolio Stock? -
2:15 Bonus: Tata Group's Penny Stock Below Rs 90, Gives 2,821% Returns In 5 Years: Announces Q4 Report Card -
Rs. 240/Share Dividend: May 7 Fixed As Record Date; Buy The IT Stock To Be Eligible? -
1:5 & 1:2 Split, Rs 6/Sh Dividend: Fertilizer Stock Coming Up With 600% Payout; Record, Payment Dates Fixed -
Cube Highways Trust Set to Acquire Seven Highway Assets Worth Rs 5,172 Crore -
1:10 Split, Rs 51 Dividend: Accumulate Tata Stock, TP Rs 170; Big Update On £1.25 Bn Investment -
Tech Mahindra Sets Three-Year Plan for Robust Growth and Market Leadership by FY27 -
Tech Mahindra Q4 Net Profit Falls 41%, Announces Growth Strategy
Many PSU Banks May Skip Dividend Payout This Fiscal
The continuing accumulation of bad loans, combined with the hit to credit offtake due to the fallout of demonetisation, might result in several public-sector banks (PSB) skipping the payout.
Hit by demonetization and mounting bad loans, some public sector banks (PSBs) may skip paying the dividend which will have implications for government receipts in the current fiscal.
Some PSU bankers have already indicated to the Finance Ministry that it may not be possible for them to pay the dividend as their profits are likely to remain subdued due to lower credit offtake and rising NPAs, sources said without specifying the names of the banks.
As a result, they said, it is expected that the revenue from dividend from public sector banks is likely to be less than Rs 1,000 crore as many banks are going to skip dividend payment this financial year.
Gross NPAs of PSBs rose to Rs 6,30,323 crore at the end of September 30, as against Rs 5,50,346 crore by June 2016.
According to analysts, normal banking operation was hit for almost two months due to demonetization leading to declining in income operation of banks. The credit offtake hit a record low of 5.3 per cent following note-ban.
At this point of time, it seems difficult proposition that banks would be able to pay the dividend this year when all of them are seeking higher capital, sources said.
Last fiscal, as many as 16 PSBs, including PNB, BoB and Canara Bank, skipped paying the dividend in 2015-16, leading to the three-fold decline in government receipts to Rs 1,444.6 crore.
Only six state-owned banks including SBI declared the dividend, though at a lower rate, for the financial year ended March 2016.
Under the existing guidelines, profit-making banks have to pay a minimum dividend of 20 per cent of their equity or 20 per cent of their post-tax profit, whichever is higher.
The government, which is the majority shareholder in all the public sector banks, witnessed 67 per cent decline in dividend receipt from PSU banks at Rs 1,444.6 crore as against Rs 4,336.22 crore in the previous fiscal.
According to the Finance Ministry data, the highest dividend was paid by SBI to the government at Rs 1,214.6 crore during 2015-16, 22 per cent lower than the previous fiscal.
As regards Union Bank of India, the dividend payout was one-third of the previous fiscal at Rs 85 crore. For Oriental Bank of Commerce, it was one-fifth compared to the previous financial year at Rs 12.4 crore despite an increase in government holding due to capital infusion.
Those which skipped dividend payments included Allahabad Bank, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, Corporation Bank, Punjab National Bank, Dena Bank and Syndicate Bank, reports PTI.
Goodreturns.in
