The Hindu Business Line : UCO Bank sticks to RBI norms, to pay 8 pc dividend

UCO Bank is to pay dividend at eight per cent for 2003-04, according to a decision taken by the bank's board at a meeting held in New Delhi on Wednesday.

This follows Reserve Bank of India's instruction to the bank to restrict the dividend payout ratio to within 15 per cent. At eight per cent dividend, the payout ratio will be 14.7 per cent, entailing an outgo of Rs 72.14 crore including tax. Without tax, the total dividend payment will amount to Rs 63.95 crore.

It might be recalled that the UCO Bank board, at the time of finalising accounts for 2003-04 about a month ago, had proposed 10 per cent dividend (subject to RBI approval), entailing a dividend payout ratio of 18.38 per cent and an outgo of Rs 90.18 crore including tax and Rs 79.94 crore without tax.

"Following the drop in the rate of dividend payment, the bank will save about Rs 18 crore which will be transferred to the reserve," Mr V.P. Shetty, CMD of UCO, told Business Line here on Thursday. Meanwhile, the bank management is going ahead with its preparation for annual general meeting to be held here on June 15. This will be the bank's first AGM after the public issue.

Mr Shetty indicated that the board would be expanded to induct shareholders' representatives and for this an extra-ordinary general meeting would be held. Right now, the board comprises six members, one each from the RBI and the Finance Ministry, one chartered accountant and one workmen's representative in addition to the CMD and the Executive Director of the bank. "The Government will most probably nominate a few more members on the board," Mr Shetty added.