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Question

RBI has suggested a relaxation of rules regarding dividend distribution:

1. A commercial bank should have a minimum total capital adequacy of 11.5 %

2. For a small finance bank and payment banks it has been set at 15 % 

3. For local area banks and regional rural banks it has been set at 12 %

Which of the following statements is/are correct?

A 1 only Correct Answer Incorrect Answer
B 1 & 2 Correct Answer Incorrect Answer
C 2 & 3 Correct Answer Incorrect Answer
D 1 & 3 Correct Answer Incorrect Answer
E All the above Correct Answer Incorrect Answer

Solution

A commercial bank should have a minimum total capital adequacy of 11.5 per cent to be eligible for declaring dividend, while the same for a small finance bank and payment banks has been set at 15 per cent, and 9 per cent for local area banks and regional rural banks.

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