Declaration of dividends by banks

Dividend payout ratio capped for banks; eligible banks may declare dividends only under prudential criteria and reporting obligations.

Banks may declare dividends only if they meet prudential eligibility criteria-minimum Capital Adequacy Ratio across relevant years, prescribed Net NPA thresholds, compliance with statutory and regulatory requirements, adequate provisioning and transfers to statutory reserves, payment from current-year profits, and absence of explicit regulatory restrictions-and then only within a capped dividend payout ratio determined by a matrix linking allowable payout ranges to capital adequacy and Net NPA bands, with adjustments for extraordinary items, auditor qualifications and specified reserve shortfalls.