Dividend Payout Policy: A Study on Indian Banking Industry

Abstract

In corporate finance one of the most important policies is dividend policy not only to the company but also to the shareholders, the consumers, the workers, regulatory bodies and the government. Dividend decisions are important as other financial decisions depend on it. The present paper represents dividend payment pattern in Indian banking industry. The paper discusses the variables which determine the dividend policy of Indianbanks and conclude that academic researcherscannot state a theoretical optimal dividend policy that simultaneously fits all banks due to various factors. The objective of the present study is to determine the trend of dividend payments of sample banking companiesin India.This study is based on a sample of 21banks in Indian banking sector for the period 2006 to 2015.The researchers used various statistical tools such as Mean, Standard Deviation, Coefficient of Variation, and ANOVA. The analysis concludes that banking companies belonging to the same industry adopted a different dividend policies among themselves.