Dividend Policy Determinants in Public Sector Banks : A Panel Data Approach

Public sector banks in India have always been regarded as the mainstay of the Indian economy. The dividend policy of these banks reflects the association of risk and return with regard to securities. This paper portrays the effort to develop an understanding with regard to the impact of various factors on the dividend policy of the Public Sector banks. For the purpose dividends disbursed by nineteen public sector banks have been analyzed with regard to eight factors for their influence on them. The factors considered in the study include Firm Size, Profitability, Market Capitalization, Return on Equity, P/B value ratio, Return on Assets (ROA), Firm Risk and Growth. The data for the study was collected for a period of fifteen years beginning from March 2003 to March 2017. The data used in the study was collected from Capitaline Plus Database and was analyzed using bi-variate, multi-variate and Panel Data Regression techniques. The results indicated that all factors considered in the study had an impact on the Dividend Policy further it was found that while Profitability and P/B value ratio had a significant positive impact, Risk had a significant negative impact on it