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RBI’s NBFCs dividend criteria: Most NBFCs in sync with norms, says Emkay Global

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Barring the LIC Housing Finance, most non-banking financial companies (NBFCs) are in sync with the Reserve Bank of India’s (RBI) draft rules on dividend pay, said Emkay Global’s Jignesh Shial on Thursday.

Barring the LIC Housing Finance, most non-banking financial companies (NBFCs) are in sync with the Reserve Bank of India’s (RBI) draft rules on dividend pay, said Emkay Global’s Jignesh Shial on Thursday.
According to the draft dividend payout circular released by the RBI on Wednesday a NBFC with a minimum 15 percent capital adequacy and net non-performing assets (NPA) below six percent for three years will be eligible to declare dividend from this fiscal onwards.
Speaking in an interview to CNBC-TV18, Jignesh Shial, Research Analyst at Emkay Global Financial Services said, “The norms are in sync with what NBFCs have been doing. The only exception we could find it out is LIC Housing Finance, which has capital adequacy below 15 percent as of now. However, there is an exception given by RBI. If they can manage to shore up the capital adequacy by end of this financial year then they will be able to distribute dividend.”
Some companies may have to pay lower dividend, however, they too will be qualified under the new norms.
“Most of the NBFCs are in sync with the norms. There may be some amount of lower dividend payouts for PFC, REC as such but they also will be qualified for the dividend payment as per the RBI’s new norms,” he said.
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