The Union government is likely to rake in almost Rs 1,500 crore (Rs 15 billion) interim dividend in 2003-04 from public sector banks, if they maintain last year's payout ratio.

The government has reportedly asked all public sector banks to pay interim dividend, to shore up its fiscal deficit for the current year.

A study by the Business Standard Research Bureau shows that the 20 public sector banks that paid dividend to the government last year could pay almost Rs 1,500 crore (Rs 15 billion) in interim dividend this year at the same payout ratio. But the sky is the limit if the payout ratio is raised.

In 2002-03, these public sector banks paid a dividend of Rs 1,749 crore (Rs 17.49 billion) at a payout ratio of 15.94 per cent.

With the government's aggregate shareholding at around 69 per cent of the paid-up capital of these banks, it received almost Rs 1,200 crore (Rs 12 billion) in the last fiscal.

The study is based on the assumption that the public sector banks will apply last year's payout ratio to their annualised half-yearly net profits. Only banks that paid dividend in 2002-03 have been considered for this study.

In 2002-03, the 20 public sector banks earned a net profit of Rs 10,973 crore (Rs 109.73 billion) and paid a dividend of Rs 1,749 crore, which is an average dividend payout of 15.9 per cent.

Based on the net profits earned in the half year ended September 2003, amounting to Rs 13,337 crore (Rs 133.37 billion) when annualised, these banks will pay a total dividend of Rs 2,147 crore (Rs 21.47 billion), of which the government's share will be around Rs 1,475 crore (Rs 14.75 billion).