Well-capitalized banks may soon be allowed by the Federal Reserve to increase dividend payments, Reuters reported.

Citing unidentified sources, Reuters said the Fed is expected to take a conservative approach in deciding which banks can increase dividends and that it will assess each bank on an individual basis.

Analysts say that banks, which have been clamoring to boost dividends as regulators fret over an uncertain economic outlook and new capital rules, are better capitalized than they have been for some time.

“If you’ve seen the numbers that the banks are producing, things are getting a lot better,” said Greg Donaldson, founder of Evansville, Ind.-based Donaldson Capital Management.

Donaldson noted that retail investors who are still significantly invested in banks and hear that the economy is improving are asking to see returns on their investments.

“The economy and many older Americans rely on dividends,” said Scott Talbott, an executive with The Financial Services Roundtable. “And, if a bank is strong enough, it should be allowed to resume paying dividends.”

According to one source, the Fed doesn’t want to stop banks that are viewed as especially strong from boosting their payouts to shareholders.