Determinants of Dividend Policy in Indian Banks: An Empirical Analysis

M Sudhahar and T Saroja

The IUP Journal of Bank Management, 2010, vol. IX, issue 3, 63-75

Abstract: This study analyzes the trends and determinants of the dividend policy of banks in India. The banks which are actively traded under Bombay Stock Exchange (BSE) A and B Groups are considered as sample for the study. A multiple regression model, in addition to Lintner model, extended version of Lintner model, such as Brittain’s cash flow model, Brittain’s explicit depreciation model and Darling’s model, have been used for testing the independent variables. The period of study is for ten years, from 1997-98 to 2006-07. Brittain’s explicit depreciation model is found to be the best model in explaining the dividend policy of the banks. In other words, the last year divided followed by current year depreciation and current year profit after tax play a positive role in the dividend policy for the current year among Indian banks.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjbm:v:9:y:2010:i:3:p:63-75

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