Centre eyes ₹20-25k cr from PSU banks as dividend in FY25

Projected inflow will strengthen non-tax revenue, support govt's fiscal consolidation efforts

- Rhik Kundu & Subhash Narayan

The government expects to garner ₹20,000-25,000 crore in fiscal year 2025 (FY25) dividends from public sector banks, which have scored record profits and notched up sustained growth, two people familiar with the matter said, requesting anonymity.

The projected inflow will strengthen non-tax revenue and support the government's fiscal consolidation efforts. The Centre received about ₹18,000 crore in dividends from state-owned lenders in FY24 and ₹13,804 crore in FY23.

This optimistic outlook follows a record ₹1.78 trillion in combined net profit posted by all 12 public sector banks in FY25, marking a 26% increase over the previous year's ₹1.41 trillion. The payouts will be accounted for in FY26 by the Centre.

"The strong financial performance of public sector banks will yield higher dividends this year," the first person mentioned above said.

"Higher dividends from PSU banks will enhance the government's capacity to fund key initiatives without increasing the fiscal deficit," the person added.