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The Reserve Bank of India’s draft circular on dividend declaration by non-banking financial companies links eligibility and quantum of dividend distribution to net non-performing asset, capital to risk assets ratio and leverage.

For Power Finance Corporation Ltd., categorised as non-deposit taking systemically important non-banking financial company (NBFC-ND-SI), based on its past three years’ CRAR and current net NPA print, the criteria matrix (as per draft circular) makes it eligible to dividend payout up to 25% of earnings (versus its current policy of 30% of earnings or 5% of net worth, whichever is higher).

Click on the attachment to read the full report:

ICICI Securities PFC Company Update.pdf

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