Directive notification of declaration of dividends by NBFCs (notification dated -24.06.2021) – RBI

• 25th, June 2021
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 Directive notification of declaration of dividends by NBFCs (notification dated -24.06.2021) – RBI

•      In order to infuse greater transparency and uniformity in practice, it has been decided to prescribe guidelines on distribution of dividend by NBFCs.

• Applicability

  o   These guidelines shall be applicable to all NBFCs regulated by RBI1 as below:

  o   Applicable NBFCs as defined in Paragraph 2(2) of Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016; and

  o   Applicable NBFCs as defined in Paragraph 2(2) of Non-Banking Financial Company – Non- systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016.

•  Effective Date

  o   These guidelines shall be effective for declaration of dividend from the profits of the financial year ending March 31, 2022 and onwards.