RBI announces prudential norms for dividends by NBFCs including housing finance companies
The Reserve Bank of India (RBI) on Thursday announced prudential norms for dividends by non-banking finance companies (NBFCs), including housing finance companies (HFCs).
The rules link dividend payment to their capital ratios and net non-performing assets and will be effective from the profits of financial year ended March 31, 2022
A dividend paying NBFC must have a net NPA ratio of less than 6 per cent in each
of the last three years, including at the close of the financial year for which the dividend is proposed to be declared.
The RBI has also imposed a ceiling on the dividend payout ratio, which is the ratio between the dividend and net profit.
This will be 60 per cent each for core investment companies and standalone primary dealers and 50 per cent for other NBFCs.
There is no ceiling for NBFCs that do not accept public funds and do not have any customer interface.
Systemically important and deposit-taking NBFCs will have to maintain a minimum capital ratio of 15 per cent — Tier I and Tier-II capital — to pay dividend.
Housing finance companies should also maintain a minimum capital ratio of 15 per cent by the end of the fiscal.
Sebi is planning to come out with a framework on special purpose acquisition companies (SPACs) next week, which will enable the listing of start-ups on domestic stock exchanges, sources said.