RBI's Dividend Declaration Guidelines For NBFCs Analysis - Only Maximum Ceiling Specified: ICICI Securities
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ICICI Securities Report
The Reserve Bank of India has issued the final guidelines on distribution of dividend by non banking financial companies effective from FY22 and onwards.
It has specified minimum prudential norms with respect to capital adequacy ratio (of not less than 15% for NBFC-non-deposit taking systemically important, NBFC-deposit, NBFC-infrastructure finance companies, NBFC-micro financial institutions, housing finance companies, government NBFCs), leverage (of not more than seven times only for NBFC-non deposit) and net non performing loans (of less than 6%) for all NBFCs.
However, it has done away with the suggested matrix framework of dividend payout ratio (based on various levels of these parameters) for NBFC-D and NBFC-NDSI.
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