The Reserve Bank of India (RBI) has revised the framework governing dividends declared by banks and introduced fresh prudential norms that apply from FY 2026–27. Replacing the 2025 framework, the new rules seek to protect the banking system by keeping capital buffers strong and linking payouts more closely to each bank's financial health. Banks may not distribute more than 75% of their profit after tax as dividends. Dividend decisions will depend on the capital adequacy ratio, profitability and asset quality. Foreign banks may remit profits to their parent entities without prior approval, subject to regulatory conditions.