The Directions require banks to meet specified eligibility conditions, including compliance with regulatory capital requirements, positive adjusted profit after tax, and absence of regulatory restrictions before declaring dividends or remitting profits. The permissible dividend payout for banks incorporated in India is linked to the CET1 capital ratio and capped at 75% of PAT, with higher capital levels allowing higher payout percentages. The Directions also prohibit dividend payments from extraordinary profits, overstated earnings, or unrealised valuation gains.
(Link: RBI Directions Notification 387/2026 Dated 10/03/2026)