Revise dividend rate: RBI tells Dhanalakshmi Bank

Reserve Bank of India has asked Kerala-based Dhanalakshmi Bank to revise the dividend recommended by the bank board for FY06 as matter of prudence and a step towards improving networth.

While the bank has worked a dividend of seven per cent for the financial year, RBI has suggested the bank can shell out a maximum dividend of 5.25 per cent given its financials, according to banking sources.

The private sector bank informed the Bombay Stock Exchange that its board will meet on September 19, 2006 to consider revision in dividend, as advised by RBI. On May 25, 2006 the board had recommended Rs 0.70 per share of Rs 10 each.

The capital adequacy ratio of the bank at the end first quarter (June 2006 ) was 9.45%, just above the minimum regulatory requirement of 9%.

According to chief executive S Prasad, there was difference in interpretation between RBI and the bank in calculating the dividend that could be paid to shareholders. It is on this backdrop that RBI asked us to rework payout, he added.