Source: News Bharati English20 Nov 2016 15:57:25
New Delhi, November 20 : 16 public sector banks including Punjab National Bank, Bank of Baroda and Canara Bank, skipped paying dividend in 2015-2016 due to burden of mounting NPA’s. This led to treble decline in government receipts to Rs.1, 444.6 crore.
Profit making banks have to pay minimum dividend of 20% of their equity or 20% of their post tax profit whichever is higher, according to the existing guidelines.
The banks which skipped dividend payments are Allahabad Bank, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, Corporation Bank, Punjab National Bank, Dena Bank and Syndicate Bank. The six state-owned banks including State Bank of India declared dividend at a lower rate for the fiscal ended March 2016.
According to Finance Ministry data, the highest dividend was paid by SBI to government at Rs 1,214.6 crore during 2015-16, 22 per cent lower than the previous fiscal.
The government, which is the majority shareholder in all the public sector banks, witnessed 67 per cent decline in dividend receipt from PSU banks at Rs 1,444.6 crore as against Rs 4,336.22 crore in the previous fiscal.
The dividend payout of Union Bank of India was 1/3rd of the previous fiscal at Rs. 85 crore whereas it was 1/5th for Oriental Bank of Commerce as compared to the previous financial year which was Rs.12.4 crore despite increase in government holding due to capital infusion.
Due to heavy provisioning for NPA’s, many banks posted losses during the last quarter of fiscal year as balance sheet of most of the banks were under stress due to clean-up exercise. Now the banks have been given time till March 2017 to clean up their balance sheet.
Gross NPAs of the public sector banks had increased from 5.43% (Rs.2.67 lakh crore) in 2014-15 to 9.32% (Rs.4.76 lakh crore) in 2015-16 of the total advances.