Financial Daily from THE HINDU group of publications
Tuesday, Jun 15, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jun 15, 2004 |
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Money & Banking
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RBI & Other Central Banks No dividend curb for banks with capitalised software costs K.R.Srivats
New Delhi , June 14 THE Central Government has made it clear that an existing restriction on payment of dividend under the Banking Regulation Act would not be applicable to a banking company that has capitalised expenses relating to computer software (not represented by tangible assets). The only requirement is that the banking company should have complied with accounting standard on `intangible assets' issued by the Institute of Chartered Accountants of India (ICAI). The Finance Ministry on the recommendation of the Reserve Bank of India has now issued a notification to this effect. Section 15(1) of the Banking Regulation Act prohibits a banking company from paying any dividend on its shares until all its capitalised expenses (including preliminary expenses, organisation expenses, share-selling commission, brokerage, amounts of losses incurred and any other item of expenditure not represented by tangible assets) have been completely written off.
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