BREAKING NEWS

BREAKING NEWS ""**Expected DA for Bank Employees from Aug 2024 MINIMUM 7 SLAB AND MAXIMUM 24 SLAB*****I *****

VISITOR FROM WORLD

Free counters!

YOU ARE VISITOR

Blog Archive

LIVE

BREAKING NEWS ""**If we want PSU bank to compete with Pvt bank ---Give them a break Saturday first****Outcome of Today’s meeting with IBA - 31.01.2023*********

Monday, March 21, 2016

Govt expects no dividend from at least 9 PSU banks

NEW DELHI: The finance ministry has not budgeted for any dividends from at least nine public sector banks during the next fiscal, in what is being seen as an indication that the government expects the finances of several lenders to remain under stress even during 2016-17.

With rising bad debt that has pushed several banks into losses, just five banks -Andhra Bank, Canara Bank, Punjab & Sind Bank, Union Bank and State Bank of India -are in line to pay dividends during the current financial year, a statement prepared by the finance ministry has revealed. In all cases, the payout will be much lower than what the government had originally budgeted for.

Against dividend payments of Rs 10,433 crore from banks, financial institutions and insurers in the budget estimates for 2015-16, the government has more than halved its projections to under Rs 5,100 crore in the revised estimates.Next fiscal, it expects a pickup with payout from these entities estimated to rise nearly 37% to Rs 6,974 crore.


Of this nearly a third or Rs 2,215 crore will come from LIC, the government's favourite cash cow, followed by State Bank of India (Rs 1,143 crore) and Bank of Baroda (Rs 501 crore).


The next fiscal will be the second year in a row when nine banks would not be making an annual payout to its shareholders, led by the government.This year, more than half of the 32 government-owned banks, FIs and insurance companies are not going to pay dividends.All these entities, barring IIFCL and Bharatiya Mahila Bank, were budgeted to shell out hefty dividends during the current fiscal. The next fiscal will be the second year in a row when nine banks would not be making an annual payout to its shareholders, led by the government. This year, more than half of the 32 government-owned banks, FIs and insurance companies are not going to pay dividends. All these entities, barring IIFCL and Bharatiya Mahila Bank, were budgeted to shell out hefty dividends during the current fiscal.RBI's insistence on classifying several loans, where repayments have been irregular, has driven several state run players including Bank  of Baroda, Bank of India, IDBI Bank, Indian Overseas Bank and Oriental Bank of Commerce into losses. Others such as SBI and PNB have reported a sharp fall in profits as theyset aside funds to cover for potential non-payment from several companies.


For long, analysts have argued that the government should seek lower dividends so that those earning profits can plough back a part of the funds to meet the capital requirements. The rise in bad debt and regulatory requirements has forced the government to provide more equity to public sector banks as the Centre has committed to maintain majority stake in these entities.

No comments:

33.9 million Jobs: Good News! India plans to add 33.9 million jobs by 2028

33.9 million Jobs : India’s workforce is anticipated to expand from 423.73 million in 2023 to 457.62 million by 2028, adding a net gain of a...

script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js">