This PSU Bank pays Rs 969.64 Crore Dividend to Government of India for FY26

The Indian government received a dividend of Rs 969.64 crore from the Central Bank of India for FY26. For the fiscal year 2025–2026, the Central Bank of India announced and paid its fourth interim dividend at a rate of 6%. As a result, the bank's total interim dividend for FY 2025–2026 has reached 12%, with the first three quarters of the fiscal year seeing the declaration of a 6% interim dividend. The Government of India would get ₹969.64 crore in total dividend payments for FY 2025–2026.

Shri Kalyan Kumar, Managing Director and CEO of Central Bank of India, along with Executive Directors Shri M. V. Murali Krishna, Shri Mahendra Dohare and Shri E. Ratan Kumar, today presented the fourth interim dividend cheque of ₹484.82 crore payable to the Government of India to Union Finance Minister Nirmala Sitharaman at the Ministry of Finance in New Delhi. The cheque presentation ceremony was also attended by Smt. Shalini Pandit, Joint Secretary, Department of Financial Services, Ministry of Finance, Government of India, and Shri Shishram Tundwal, General Manager, Central Bank of India.

Banks pay dividends to distribute a part of their profits to shareholders. When a bank earns a profit, it does not keep the entire amount for itself. A portion of the profit may be paid to shareholders as a dividend, while the remaining amount is retained for business growth, capital requirements, and future operations. In the case of public sector banks, the Government of India is usually the largest shareholder. Therefore, when a bank declares a dividend, a significant portion of the dividend is paid to the government. Dividend payments also reflect the bank’s strong financial performance and provide income to shareholders for their investment in the bank.

The Government shareholding in Banks is as follows:

Bank Name	Govt Stake (Dec 25)	Govt Stake (June 24)
State Bank of India	55.50%	57.54%
Canara Bank	62.93%	62.93%
Bank of Baroda	63.97%	63.97%
Punjab National Bank	70.08%	70.08%
Bank of India	73.38%	73.38
Indian Bank	73.84%	73.84%
Union Bank of India	74.76%	74.76%
Bank of Maharashtra	73.60%	86.46%
UCO Bank	90.95%	95.39%
Central Bank of India	89.27%	93.08%
Indian Overseas Bank	92.44%	96.38%
Punjab & Sind Bank	93.85%	98.25

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Public sector banks to pay record Rs 7,867 crore dividends to government this year | See Which banks give how much dividends

 State-owned banks will give the government a record Rs7,867 crore in dividends this year, an indication of better profitability and capital position, largely driven by the falling stock of non-performing assets (NPAs).

Nine out of 12 public sector banks (PSBs) have paid dividends for the fiscal year ended March 2022, led by the country's largest lender State Bank of India (SBI) with Rs3,616 crore followed by Union Bank of India(UBI) with Rs1,084 crore.

This is a big improvement from FY21 when only SBI and Indian Bank gave any dividend to the government.

Krishnan Sitaraman, senior director at rating agency Crisil said the dividend numbers show that PSBs are now back to business as usual after being bowed down by high provisions against rising NPAs since fiscal 2016.

"The capital adequacy of all PSBs is now 100 basis points higher than the minimum required; just four years ago, only 20% of PSBs were this comfortable," he said. "This is the best capital position in five years and is now backed by loan growth, which augurs well for these banks."

Improved recoveries, which led to falling provisions and lower NPAs, have been key reasons for the PSB recovery.

At its peak, the Indian banking system had 11.2% NPAs at the end of March 2017 and those of PSBs were much higher at 15%. Gross NPAs for PSBs have since declined to 7.9% at the end of December 2021.

Sitaraman said the fall in NPAs has been backed by higher credit growth, improving profitability. Crisil expects bank credit growth to improve to 11-12% in fiscal 2023 from 9.6% in fiscal 2022 and 5% in fiscal 2021.

The higher dividend from PSBs is a minor relief for the government, which is staring at a gap in its balance sheet after the Reserve Bank of India said it will transfer Rs30,307 crore to the government as surplus, lower than the Rs74,000 crore budgeted.

Expectations are that PSBs will continue to pay dividends to the government as business prospects improve. Consistent dividend payments will also improve these banks' prospects before investors.

"PSBs now have a good capital cushion and can now say have turned around," said Karthik Srinivasan, group head, financial sector ratings, at rating agency ICRA. "It is fair to assume they will remain profitable in the short term and continue offering dividends."

Among the banks that have not announced dividends are UCO Bank , Central Bank of India and Indian Overseas Bank, which are all profitable at the end of March 2022. Regulations prevent them from declaring dividends because either their accumulated losses are high, their reserves are negative, or they are under RBI restrictions.

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