An Application of Lintner’s Dividend Behaviour Model in Indian Banking Sector

In the present paper an attempt has been made to assess the applicability of Lintner’s Dividend policy model in Indian Banking Sector. For this purpose, the researchers have taken DPS, EPS and Lagged DPS as determinants of dividend decision and check the significance of the variables. Total 05 banks from private sector banks are considered as sample for 10 years from 2009-10 to 2018-19. The simple multiple regression analysis and one- way Anova test have been carried by using SPSS- 22 and Microsoft – Excel. The result found that there is a significant difference in DPS and EPS between selected sample banks and Lintner’s model is applicable in PVBs in India. The paper found that the previous year’s dividend is significantly affected in the dividend decision between during the study period except from 2016-17 to 2018-19. The result reveals that the PVBs mainly rely on the past dividend in designing their dividend policy and are less stable in pursuing their dividend policy.