RBI’s new dividend rules for banks: What may change from FY27

The Reserve Bank of India (RBI) has issued revised directions governing how banks declare dividends and remit profits, tightening prudential conditions and linking payouts more closely to capital strength and asset quality. According to Sandeep Mehta, partner at JSA Advocates & Solicitors, the move could help Indian companies enter joint ventures and collaborations with investors from neighbouring countries, particularly China, to expand manufacturing capacity and integrate more deeply into global supply chains, while ensuring that majority ownership and control remain with resident Indian entities. He added that corresponding amendments to India’s foreign exchange regulations are still awaited to operationalise the policy changes. Read more