Monday, June 15, 2009

Urban Cooperative Banks can declare dividend on their own: RBI

The Reserve Bank of India today said that the Urban Cooperative Banks can henceforth declare dividend without prior permission from the Apex Bank The Bank, in a circular here, said that the UCBs, however, need to comply with certain parameters laid down by it. These parameters included compliance with CRAR norms as prescribed by RBI.

Net NPA were less than 10 per cent after making all necessary provisions as per the assessment made by RBI in its last inspection report.

There was no default in CRR/SLR during the year, for which dividend is proposed. All the required provisions should have been made for NPAs, investments and other assets as per the prudential norms prescribed by RBI. Dividend was to be paid out of the net profit and after making all statutory provisions and adjustment for accumulated losses in full.

UCBs complying with all other parameters, except the one at para 3 (ii) above, may approach the concerned Regional Office of the Reserve Bank for permission for dividend declaration.

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