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New dividend policy not to affect most NBFCs: Report

The new dividend distribution policy for non-banking lenders is unlikely to impact most of them as their payout ratios have been hovering at 10-20 for the past three years, according to a report. The Reserve Bank of India on December 9 issued a new draft dividend distribution policy for NBFCs to ensure financial discipline and transparency under which only those NBFCs that meet the prescribed prudential requirements on capital and asset quality will be allowed to pay dividends. The new payout norms assume importance as unlike banks, currently, there are no guidelines in place concerning the distribution of dividend by NBFCs. The RBI had on October 4 asked banks to not to pay dividend this year given their stretched balance sheets pummelled by the pandemic.

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