June 27, 2022 18:01 (IST)
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Public sector banks to pay record Rs7,867 crore dividends to govt this year Public Sector Bank

Public sector banks to pay record Rs7,867 crore dividends to govt this year

India Blooms News Service | @indiablooms | 27 May 2022, 06:20 pm

New Delhi: State-run banks will give the government a whopping Rs7,867 crore in dividends this year, indicating better profitability and capital position, mainly due to falling stock of non-performing assets, media reports said.

Nine out of 12 public sector banks (PSBs) have paid dividends to the Centre, led by the country's largest lender State Bank of India (SBI) with Rs3,616 crore followed by Union Bank of India (UBI) with Rs1,084 crore, Economic Times reported.

Canara Bank paid Rs742.06 crore, Bank of India Rs668.26 crore, Indian Bank Rs646.50, Punjab National Bank Rs515.49, Bank of Baroda Rs397.46 crore, and Punjab & Sind BankRs 206.43 crore.

This is a huge improvement from FY21 when only SBI and Indian Bank disbursed any dividend to the government.

In 2017, PSBs had 15 percent NPAs while the Indian banking system had 11.2 percent NPAs as a whole. Gross NPAs for PSBs have since declined to 7.9 percent at the end of December 2021, it added.

The higher dividend from PSBs is a little relief for the Centre, owing to a gap in its balance sheet after the Reserve Bank of India said it will transfer Rs30,307 crore to the government as surplus, lower than the Rs74,000 crore budgeted.

It is expected that dividends will continue to flow from PSBs to the government as business prospects get better.  

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