Banks pay good amount of dividend to their shareholders from time to time. In 2008-09, the dividend payment of 30 banks increased by 20.8%. But, the dividend payout ratio of the bank decreased in 2008-09 as against 2007-08.

As we know, the RBI has raised the cap on bank?s dividend payout ratio from 33.33-40%. The aggregate total net profit of 30 banks has increased 25.9%, from Rs 30,225 crore in 2007-08 to Rs 38,056 crore in 2008-09.

Their total equity dividend has increased from Rs 5,997 crore to Rs 7,242 crore during the study period, decreasing the equity dividend to net profit ratio from 19.84% in 2007-08 to 19.03% in 2008-09. One interesting thing is that no banks exceeded the RBI norm of ratio.

In 2008-09, the top five, according to dividend payout ratio, were Andhra Bank, ICICI Bank, IndusInd Bank, IDBI Bank and Oriental Bank. Among these, a significant increase in dividend payout was seen in the case of ICICI Bank.

Among the banks, those who raised their dividend payment significantly during 2008-09 are SBI, Axis Bank, IndusInd Bank, Bank of India and Oriental Bank. The rate of dividend of Axis bank increased from 60% during 2007-08 to 100% during 2008-09. This can be explained from the performance of the bank. The net profit of the bank increased by 69.5% to Rs 1,815 crore during 2008-09 from Rs 1,071 crore during 2007-08.

But the dividend payout ratio of Axis Bank decreased from 20.04% to 19.78% during the study period.

According to the directors? report, the bank has delivered a strong performance in 2008-09 in the backdrop of widespread turbulence in the global financial markets as well as a slowdown of economic growth in India .

The bank?s strategy of building customer franchises and tapping the opportunities within them for growing its business continues to deliver strong results.

In terms of dividend payout ratio, significant increase was registered in the case of Bank of India, Dhanalakshmi Bank, Indian Overseas Bank and IndusInd Bank.

The dividend payout ratio of IndusInd Bank increased from 25.58% in 2007-08 to 28.73% during 2008-09.

An opposite trend was seen in the case of Bank of Baroda, Bank of Maharashtra, Canara Bank, Oriental Bank and Uco Bank.

The dividend payout ratio of Uco Bank decreased from 19.39% during 2007-08 to 9.85% during 2008-09.

Out of the 30 banks, the highest and lowest rates of dividend were seen in the case of SBI and Bank of Rajasthan, respectively, during 2008-09.