The Directions effective from FY 2026–27 tighten and standardise rules governing dividend pay-outs and profit remittances. Applicable to all commercial banks (excluding SFBs, LABs, Payments Banks, and RRBs) and foreign banks operating in branch mode, these mandate strict board oversight, sustained compliance with regulatory capital requirements, and positive adjusted profits as pre-requisites. Dividend pay-outs by Indian banks are capped through a CET1 based slab system and further limited to an overall ceiling of 75% of profit after tax, adjusted for net NPAs and exclusions such as exceptional income and unrealised gains. Foreign banks may remit profits without prior approval, subject to audit and compliance safeguards.
(Link: Press Release RBI Draft Directions Dated 06/01/2026)
(Link: For Commercial Banks RBI Draft Directions Dated 06/01/2026)