INSUBCONTINENT EXCLUSIVE:
Mumbai: The Reserve Bank of India (RBI) on Friday barred banks from paying dividends for the fiscal year ended March 2020 so that they
conserve capital in view of the economic shock caused by the Covid-19 pandemic.
In his address, which included other policy measures, RBI
restriction will be reviewed on the basis of the financial position of banks for the quarter ending September 30, 2020, Das said.
Analysts
Banks also do not offer a high dividend yield compared to other sectors like FMGC, IT or pharma; so in that sense, it will not impact
crore payment to shareholders.
Public sector banks did not pay any dividend last fiscal.
On Friday, bank stocks rose after the RBI announced
additional liquidity measures that would push credit growth.
The 12-share Nifty Bank Index gained 6.92% on Friday, led by Axis Bank (up
The real problems in the sector are to do with asset quality and liquidity due to Covid-19
rerating on the bank stocks due to this move by RBI.
