Dividend policy is a part of the most significant financial decisions of corporate organizations, particularly in the banking sphere, where investor confidence and financial stability are most likely to be given top priority. The research paper analyzes the financial component of dividend policy as a measure of shareholder wealth for State Bank of India (SBI) and HDFC Bank the period for the period of FY 2021 to 2025. The paper is based on secondary data and trend analysis, graphical evaluation, and a paired-samples t-test. Ideally, it would consider the trend based on dividend payouts and the effect they have on the generation of shareholder value. The findings show that dividends of the two banks have grown over the period of study. However, HDFC Bank is superior and more consistent in its dividend payouts and is superior to SBI. The statistical results confirm that the dividend policy of the two banks is quite different. It is concluded in the paper that the dividend policy directly affects the shareholder wealth and it is an important factor that must be considered in making investment decisions..
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