Central bank's proposals on dividend payouts weigh on state-owned NBFCs

The RBI has proposed that the payouts from next financial year will depend upon factors such as capital adequacy, non-performing asset ratio and leverage ratio.

Shares of state-owned REC, Power Finance Corporation (PFC), LIC Housing Finance, and M&M Financial Services (MMFS) fell around three per cent each on Thursday after the Reserve Bank of India (RBI) proposed to cap dividend payouts by non-banking financial companies (NBFCs).

Under the new rules, the dividend payouts will be dependent upon factors such as capital adequacy, non-performing asset (NPA) ratio and leve­rage ratio from the next financial year.

“Among the listed NBFCs, we expect PFC and REC to react negatively to the new rules as both the entities have a historic dividend payout of 45 per cent. As per new norms,