In the light of Public Sector Banks’ (PSBs) special role and importance in the banking industry and in advancing the economic policies of the Government, in 2008, the Government asked all the Ministries / Departments and Central Public Sector Enterprises to place at least to the extent of 60% of their surplus funds with PSBs. The said instructions have again been reiterated in 2012 with certain modifications (available on website http://financialservices.gov.in/). In so far as dividend is concerned, it is a stream of revenue to the shareholders including the Government and is declared by the respective boards of PSBs keeping in view their profit, relevant legal provisions and extant instructions on the subject.

This was stated by the Minister of State for Finance, Shri Namo Narian Meena in a written reply to a question in the Rajya Sabha today.

DSM/RS/ka

(Release ID :92543)

Placement of surplus funds with public sector banks: Ministries and CPSEs to park majority of excess cash; dividends board-declared. Government instructions direct Ministries, Departments and Central Public Sector Enterprises to place a substantial portion of their surplus cash with public sector banks as part of policy to utilise PSBs in advancing economic objectives; dividend receipts are treated as shareholder revenue and are declared by PSB boards based on profit, legal provisions and extant instructions.