The Centre wants Kolkata-headquartered UCO Bank to pay a higher dividend. The bank's board will consider a proposal for “enhancement of dividend in 2010-11 as per the directive from the Centre” on May 17. UCO reported a 10 per cent dip in profits during the last fiscal and closed the accounts for the year with 20 per cent dividend on April 29.

In a notice to the BSE, the bank said that “if enhancement of dividend is considered” the board will simultaneously revise and approve the balance-sheet for the last fiscal.

“We will look into the declaration of dividend for 2010-11. But whether there will be an enhancement in the declared dividend or not will be decided at the meeting,” a senior bank official told Business Line .

According to a source, since accounts were not approved by the shareholders, reconsidering the dividend as well as the balance-sheet is a valid option.

“As long as the dividend is not approved in the general meeting, a decision to reconsider the rate can always be taken. Moreover, the Government has on earlier occasions asked banks to reconsider the dividend declared,” a senior official of the bank said.

Two other Kolkata-headquartered banks, Allahabad Bank and United Bank of India (UBI), however, have not received any instruction from the Government to review the dividends proposed.

“We have not received any directive or instruction from the Government to review the dividends declared,” Mr J.P. Dua, Chairman and Managing Director, Allahabad Bank, said.

Mr S. L. Bansal, Executive Director, UBI too added that UBI's “decision on declaration of dividend stands as it is.”

UCO Bank shares closed at Rs 98.15, down by over 2 per cent, on BSE on Monday.

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