Chennai, Jun 28 (IANS): Public sector Indian Bank on Thursday said the Board of Directors have decided to annul their earlier decision to declare dividend at Rs 6 per equity share as it has not provided fully for the mark-to-market (MTM) loss.

In a regulatory filing in BSE, Indian Bank said the Reserve Bank of India (RBI) has informed that the bank can declare dividend after fully providing for MTM loss.

The RBI also said dividend can be declared only after fully providing for gratuity and any other provisions staggered in terms of dispensation provided by it to all the banks.

Indian Bank said the Board of Directors a7lso decided to withdraw the second item from the agenda of the notice convening the annual general meeting.

According to Indian Bank, the RBI circulars in April had given it the option of spreading the MTM loss over four quarters commencing with the quarter in which the loss was incurred and the additional liability due to enhanced gratuity over four quarters beginning with the quarter ended March 31.

It said it had exercised the options during the quarter ended March 31 and deferred the gratuity expenditure of Rs 24.33 crore to subsequent three quarters and also spread the MTM losses of total Rs 547.01 crore to subsequent quarters (after providing for December 2017 and March 2018).

When the matter was taken up with the appropriate authorities and sought permission for declaration of dividend, the RBI advised not to pay dividend.