PSBs hand ₹9,400 crore dividend to FM Sitharaman for FY26
Synopsis
India's public sector banks collectively handed over more than ₹9,400 crore in dividends to Finance Minister Nirmala Sitharaman for FY26 — a figure that would have been unthinkable during the NPA crisis years. Bank of Baroda alone crossed a ₹20,000 crore profit milestone for the first time, signalling that the PSB turnaround is no longer a promise but a balance-sheet reality.
Key Takeaways
Public sector banks presented dividend cheques worth over ₹9,400 crore to Finance Minister Nirmala Sitharaman on 29 June 2026 for FY26 .
Bank of Baroda handed over the largest cheque of ₹2,811 crore , after reporting its highest-ever net profit of ₹20,021 crore in FY26.
Punjab National Bank contributed ₹2,416 crore , Canara Bank ₹2,397 crore , and Indian Bank ₹1,815 crore .
Bank of Baroda declared a dividend of ₹8.50 per share ( 425% of face value) and its global business crossed ₹30 lakh crore .
The payouts reflect improved asset quality and record profitability across PSBs, reversing years of recapitalisation-era losses.
Public sector banks (PSBs) on Monday, 29 June 2026 presented dividend cheques collectively worth more than ₹9,400 crore to Union Finance Minister Nirmala Sitharaman for the financial year 2025-26, underscoring a year of record profitability and strengthened balance sheets across state-owned lenders.
Key Dividend Payouts
Bank of Baroda led the pack, handing over the largest individual cheque of ₹2,811 crore. The cheque was presented by the bank's Managing Director and Chief Executive Officer, Dr. Debadatta Chand, in the presence of Department of Financial Services Secretary Sanjay Lohiya and the bank's executive directors.
Punjab National Bank followed with a dividend cheque of ₹2,416 crore, presented by its Managing Director and CEO, Ashok Chandra. Canara Bank contributed ₹2,397 crore, handed over by its MD and CEO, Brajesh Kumar Singh. Indian Bank rounded out the major contributors with a cheque of ₹1,815 crore, presented by its MD and CEO, Binod Kumar.
Bank of Baroda's Historic Milestone
The dividend payout by Bank of Baroda follows what the lender described as a landmark year. The bank reported its highest-ever standalone net profit of ₹20,021 crore in FY26 — becoming the first year in its history to cross the ₹20,000 crore profit threshold. Its global business also surpassed ₹30 lakh crore as of 31 March 2026. For FY26, the bank declared a dividend of ₹8.50 per equity share, equivalent to 425 per cent of the face value of ₹2 per share.
What Drove the Payouts
The dividend payments reflect a broader turnaround story for India's public sector banking system. Robust earnings growth, improved asset quality, and stronger capital buffers enabled these lenders to enhance returns to the government, which remains the majority shareholder in each of these institutions. This comes amid a sustained multi-year effort to clean up PSB balance sheets following the non-performing asset (NPA) crisis of the previous decade.
What This Means for the Government
Dividend income from PSBs forms a meaningful component of the Centre's non-tax revenue. A collective payout exceeding ₹9,400 crore for a single financial year signals that state-owned banks are no longer a fiscal drag — a sharp contrast to the era of recapitalisation infusions that defined the period between 2017 and 2021. With profitability at record levels across several lenders, further dividend growth in FY27 is widely anticipated by analysts.
Point of View
400 crore dividend haul is the most visible proof yet that India's PSB recapitalisation gamble — which cost the exchequer over ₹3 lakh crore between 2017 and 2021 — is finally paying a literal return. But the more significant number is Bank of Baroda's ₹20,000 crore profit crossing: it reframes PSBs from liability to asset in the government's fiscal calculus. The test now is whether this profitability is structural or a function of the benign credit cycle. NPA ratios have fallen sharply, but a slowdown in credit growth or a rise in corporate stress could quickly reverse the trend. Dividend cheques make for good optics; the sustainability question deserves equal scrutiny.
NationPress
29 Jun 2026
Frequently Asked Questions
How much dividend did public sector banks pay to the government for FY26?
Public sector banks collectively presented dividend cheques worth more than ₹9,400 crore to Finance Minister Nirmala Sitharaman for the financial year 2025-26. The payouts were driven by record profits and improved asset quality across state-owned lenders.
Which bank gave the highest dividend cheque to FM Sitharaman?
Bank of Baroda handed over the largest individual dividend cheque of ₹2,811 crore, presented by its MD and CEO Dr. Debadatta Chand. This followed the bank's highest-ever standalone net profit of ₹20,021 crore in FY26.
What dividend did Bank of Baroda declare for FY26?
Bank of Baroda declared a dividend of ₹8.50 per equity share for FY26, equivalent to 425 per cent of the face value of ₹2 per share. The bank also crossed the ₹30 lakh crore global business milestone as of 31 March 2026.
Why are PSB dividends significant for the government?
Dividend income from public sector banks is a component of the Centre's non-tax revenue. A payout exceeding ₹9,400 crore signals that state-owned banks have shifted from being recipients of government capital infusions to active contributors to the exchequer.
Which other banks presented dividend cheques at the event?
Punjab National Bank presented a cheque of ₹2,416 crore, Canara Bank ₹2,397 crore, and Indian Bank ₹1,815 crore. All cheques were handed over to Finance Minister Nirmala Sitharaman by the respective MD and CEOs of each bank.
