The Directions require banks to satisfy eligibility requirements including compliance with regulatory capital requirements, maintains positive adjusted profit after tax, and is not under regulatory restrictions. The maximum dividend permitted is linked to the bank’s capital adequacy ratio (CAR), with higher capital levels allowing higher payout percentages, subject to an overall cap of 80% of PAT. It also prohibit payment of dividends from extraordinary profits, overstated profits, or unrealised gains.
(Link: RBI Directions Notification 389/2026 Dated 10/03/2026)