The Reserve Bank of India (RBI) on March 10, 2026, issued the Reserve Bank of India (Small Finance Banks – Prudential Norms on Declaration of Dividend) Directions, 2026.
The following has been stated namely: -
• These Directions shall be applicable to Small Finance Banks (SFBs)
• The Declaration of dividend has been stated under Chapter II
• A bank shall meet the following prudential requirements, to be eligible to declare dividends.
o The bank was in compliance with the applicable regulatory capital requirement as at the end of the previous financial year and shall continue to be in compliance as at the end of the financial year during which the dividend is proposed to be paid.
o The regulatory capital of the bank shall not fall below the applicable regulatory capital requirement even after the payment of dividend.
o The bank shall have positive adjusted Profit After Tax (PAT) for the financial year for which the dividend is proposed.
o The bank shall not be under any explicit restrictions for declaration of dividends from the Reserve Bank or any other authority.
These Directions shall come into effect from Financial Year (FY) 2026-27
[RBI/2025-26/391]
