Banks to pay interim dividend to government

Hard pressed to meet the fiscal deficit target, the government has asked state-owned banks to pay interim dividend to help it mop up resources.

Interim dividend payouts will help the government raise funds as the majority shareholder in public sector banks.

The Finance Ministry has indicated that all state-owned banks should pay dividend, depending on the strength of their balance sheets, sources said.

Union Bank of India on Wednesday declared an interim dividend of 27 per cent for the current fiscal. Oriental Bank of Commerce and Allahabad Bank will hold board meetings on January 11. Board meetings have been scheduled by Chennai-based Indian Bank on January 10 and IDBI Bank and Indian Overseas Bank on January 13.