Sixteen out of 22 public sector banks did not pay a dividend to its shareholders in the financial year ending March 31, 2016 because of rising non-performing assets in those institutions, PTI reported on Sunday. The remaining six banks that declared a dividend did so at a lower rate than the previous financial year, leading to a 67% decline in shareholder revenues for the government to Rs 1,444.6 crore.
Finance Ministry data showed that the highest dividend was given by the State Bank of India, which paid Rs 1,214.6 crore. This represented a 22% decrease from the dividend paid out by the bank during the previous financial year. The Union Bank of India paid Rs 85 crore, one-third of what it paid in the financial year that ended on March 31, 2015. The Oriental Bank of Commerce paid Rs 12.4 crore, one-fifth of what it paid before.
Banks which did not pay a dividend included the Bank of Baroda, Bank of India and Punjab National Bank. Many public sector banks reported losses during the last quarter of the previous financial year because of heavy provisioning for bad loans. The Reserve Bank of India has given the banks time till March 2017 to clean up their balance sheets.
Indian banks reported a 96% spike in non-performing assets to Rs 6,29,774 crore in June 2016 from Rs 3,20,553 crore during the same month last year. The data was made available after the RBI ordered an asset quality review. In October, RBI Governor Urjit Patel said that 65% of the financial stress in public-run banks was contributed by five sectors, and that the central bank would deal with the situation pragmatically.