Analysis of RBI Proposed Rules on NBFC Dividend Payout
Dear NBFCs either be a Bank or ready for regulations like a Bank. This is the fundamental stance RBI has now for NBFCs. Loudly announcing the stance RBI Director says NBFC should convert into banks. Soon after that RBI released proposed rules for conversion of NBFC into Bank. North Block now could not afford any other financial fiasco after ILFS, Yes Bank , DHFL, LVB , PMC Bank. So now RBI Released Proposed Dividend Payout Rules for NBFC. In this analysis we will explain these rules . Criteria : Capital Adequacy and Leverage Ratio * If A,B,C criteria are not met, NBFC still eligible to pay dividend if Net NPA ratio is less than 4% and otherwise comply with general prudential norms. Dividend Payout Ratio A. For CICs B. For NBFC-ND-SI & NBFC-D Other Criteria NBFCs should comply with the provisions of Section 45 IC of the RBI Act, 1934. NBFCs should comply with the prevailing regulations/ guideline issued by RBI. The proposed dividend should be payable only out of the ...