Banks Gain After RBI Caps Dividend Payment For FY21

Amid broad based buying, PSU Banks led the marginal rise on the indices. The rally in the PSU Bank, Nifty Bank, private bank was also fuelled after the RBI views dividend declaration norms for financial year 2021 amid Covid 19 second wave.

At the time of writing this report, Bank Nifty was up 200 points and among the PSBs, Indian Bank, SBI, Canara Bank, PNB and Bank of India were the top gainers.

Other notable gainers include Axis Bank, HDFC Bank, Kotak Mahindra Bank which logged gains of between 0.5-1 percent.

On Thursday, RBI said that amid surging Covid 19 it is important that RBI remains resilient and proactively raise and conserve capital as a bulwark against unexpected losses. Thereby, RBI said that while allowing banks to pay the dividend on equity shares, it has been decided to review the dividend declaration norms for the year ended March 31, 2021.

RBI has asked commercial banks to pay a dividend on equity shares from the profits for the financial year ended March 31, 2021, subject to the quantum of dividend being not more than fifty per cent of the amount determined as per the dividend payout ratio.

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