The Reserve Bank of India (RBI) has released five sets of proposed directions to change how the maximum eligible dividend payouts for banks are calculated. Each set of directions correspond to different types of banks operating in the country: , , , and .
The proposed directions for commercial banks also apply to banking companies, corresponding new banks, State Bank of India and foreign banks operating as branches.
These directions outline that the board must consider the auditor’s report, long-term growth plans, a bank’s current and future capital position as well as provisioning for non-performing assets.
They also outline, eligibility criteria for banks to declare dividends, the quantum of dividends payable and restrictions, how to calculate profits after tax and the reporting system.
The directions also propose penalties for non-compliance with the rules.
Comments on the proposed changes can be submitted to the RBI through email or by post by 5 February 2026.
