The Directions require banks to satisfy eligibility criteria such as compliance with regulatory capital requirements, maintaining positive Adjusted Profit After Tax (PAT), and absence of regulatory restrictions. Adjusted PAT is defined as PAT minus 50% of net NPAs. Dividend payouts are linked to the bank’s Tier 1 capital ratio, with higher capital levels allowing larger payout percentages, subject to an overall ceiling of 75% of PAT. Extraordinary income, overstated profits identified by auditors, and certain reversals of provisions are excluded from dividend calculations.
(Link: RBI Directions Notification 388/2026 Dated 10/03/2026)