The Reserve Bank of India has capped dividend payouts by banks at 75% of their annual net profits, reinforcing its focus on financial stability and capital adequacy. The move is aimed at ensuring that lenders retain sufficient earnings to absorb potential shocks and support future credit growth. By placing a clear upper limit on distributions, the regulator seeks to balance shareholder returns with the need for prudent capital management. The decision comes at a time when banks are reporting improved profitability, prompting closer scrutiny of how excess capital is allocated.