RBI assumes protective role, asks banks not to pay dividend for FY20

Experts say while the decision is positive, it may not make any significant contribution

The move by the Reserve Bank of India (RBI), asking scheduled commercial and cooperative banks to not pay further dividend for FY20 till September 30, 2020, is being seen as a pre-emptive move to protect the balance sheet of lenders.

“It is imperative that banks conserve capital to retain their capacity to support the economy, and absorb losses in an environment of heightened uncertainty,” the regulator said in a statement.

Experts say the decision is a step in the right direction, as the