Reserve Bank of India has notified the guidelines on declaration of dividend by Non-Banking Finance Companies (NBFCs) with an objective to infuse transparency and uniformity in the practice of corporates. The said guidelines will be effective from profits of FY 21-22.
The outlined provisions are mentioned hereinbelow-
S.N. |
Particulars |
Provision |
1. |
Aspects to be considered by the Board of Directors |
|
2. |
Eligibility criteria |
|
3. |
Dividend Payout Ratio |
Amount of Dividend (Extra-ordinary and exceptional profit shall be reduced from the Net profit) |
4. |
Maximum Dividend Payout Ratio |
|
5. |
Reporting |
Submission of report within 14 days from the declaration of dividend by-
|
6. |
Exception |
A NBFC (other than SPD) which does not meet the applicable prudential requirement prescribed in Paragraph (2) above for each of the last three financial years, may be eligible to declare dividend, subject to a cap of 10 percent on the dividend payout ratio, provided the NBFC complies with the following conditions: |