Mumbai: RBI on Thursday said urban cooperative banks (UCBs) which have less than five percent of NPAs and comply with Capital to Risk-Weighted Assets Ratio norms may declare dividends without its prior permission.
"It has now been decided to revise the criteria for declaring dividend without prior permission of the Reserve Bank," RBI said in a notification.
Further, it said the UCBs should have made all required provisions for NPAs, investments and others assets as per prudential norms.
The dividend should be paid out of the net profit and after making all statutory and other provisions and adjustment for accumulated losses in full, it said.
"UCBs complying with all the above parameters except net NPA (Non Performing Asset), and desirous of declaring dividend may approach the respective regional office of the RBI for permission for declaring dividend provided the net NPA is less than 10 percent," it added further.
Earlier, there was a requirement of net NPA of less than 10 percent for declaring dividend.