Instructions exist for payment of dividends by Public Sector Banks (PSUs). In terms of extant instructions all profit making Public Sector Enterprises (PSEs), which are essentially commercial enterprises, subject to specific guidelines issued from time to time, will declare a minimum dividend on equity of 20 per cent or a minimum dividend payout of 20% of post-tax profits (PAT), whichever is higher, subject of availability of disposable profits. In respect of Oil, Petroleum, Chemical and other infrastructure sectors this amount would be 30%. Besides, profit making companies with large cash surpluses and without firm plans for reinvestment shall declare special dividends. Accordingly, these instructions were also circulated to all Ministries/Departments as part of Budget Circular 2014-15.

 This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

Dividend policy for public sector enterprises mandates minimum payouts, higher sectoral rates, and special dividends for surplus cash. Instructions require profit-making public sector enterprises to declare a minimum dividend on equity equivalent to a specified minimum payout of post-tax profits, subject to availability of disposable profits; higher minimum rates apply to certain sectors and companies with large cash surpluses without firm reinvestment plans are to declare special dividends.