Finance Minister Nirmala Sitharaman Receives ₹6959.29 Crore Dividend from SBI for FY 2023-24

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Finance Minister Nirmala Sitharaman received a significant dividend cheque of ₹6959.29 crore for the fiscal year 2023-24 from State Bank of India (SBI) Chairman Dinesh Kumar Khara. This substantial payout underscores the robust performance and profitability of SBI, the country’s largest public sector bank.




The announcement was made through the finance minister’s official handle on X (formerly Twitter), @nsitharamanoffc, which posted:

“Smt @nsitharaman receives a dividend cheque of ₹6959.29 crore for FY 2023-24 from @TheOfficialSBI Chairman Shri Dinesh Kumar Khara.”

In addition to the SBI dividend, Finance Minister Sitharaman also received a cheque of ₹6959.29 crore from Shri Nidhu Saxena, Managing Director and CEO of Bank of Maharashtra, further highlighting the strong financial health of public sector banks.

The previous fiscal year saw SBI paying its highest-ever dividend of ₹5,740 crore to the Government of India, showcasing a continuous trend of substantial returns to the central government.

Increased Dividends from Public Sector Banks

According to a report in Mint from February, the central government may seek increased dividends from public sector banks for the current fiscal year due to their strong financial performance. This expectation aligns with the robust dividends already observed.

Banking Sector Outlook

An ICRA report recently revised the banking sector’s outlook from positive to stable. This revision is based on expectations of moderate credit growth and stable profitability metrics. Despite these positive aspects, the sector faces concerns about interest margin compression due to rising deposit costs over the last 18 months. However, a potential rate cut in the latter half of FY25 might help alleviate these pressures.

The report suggests that loan growth could lead to steady operating profits, supported by benign credit costs. This, in turn, will drive earnings sufficient for most banks to meet their regulatory and capital requirements.

RBI’s Substantial Dividend Payout

Adding to the financial landscape, the Reserve Bank of India (RBI) approved a substantial dividend payout of ₹2.11 lakh crore to the central government for FY 2023-24. This marks a significant increase from the previous fiscal year’s payout and highlights the RBI’s strong financial performance, driven by a 141% surge in net income due to reduced expenditures, particularly lower provisions.

The government anticipates total dividends of approximately ₹1.02 trillion from the RBI, state-run banks, and other financial institutions, as outlined in interim budget documents.

Conclusion

The receipt of substantial dividends from public sector banks like SBI and the substantial payout from the RBI reflect the strong financial health and performance of India’s banking sector. These dividends are crucial for the central government as they provide essential revenue to meet various fiscal requirements. The robust performance of these financial institutions underscores the stability and resilience of the Indian banking sector amid economic challenges.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

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