Mumbai: Taking note of the unusual slump in country's largest lender State Bank of India's (SBI) March quarter profits last fiscal, Reserve Bank of India (RBI) on Tuesday said that there was a need for banks to improve standards of their financial reporting.

"See our banks, I see when the chairman retires the profits go down," Reserve Bank of India's Deputy Governor KC Chakrabarty said at the non-financial reporting and risk management for banks and financial institutions in India conference here on Tuesday.

His comments comes after 99 percent plunge in SBI's net profit for the fourth quarter ended March 31, reported by the bank a month after Pratip Chaudhuri took charge as the chairman of the bank succeeding  OP Bhatt.

The bank's net profit for the fourth quarter ended March 2011 was just Rs 20.8 crore against Rs 1,866.60 crore in the same quarter of the previous fiscal.

Chaudhuri had attributed the huge decline to one-time provisions for bad loans, and pensions.

"If we don't audit or create the standard then anybody will report anything that will not be meaningful and nobody will rely on that. Books should not be as per the minds of the Chairman, but reporting should be as per books," he said.

On financial reporting standards, Chakrabarty said that there was a need to improve both the standard of reporting as well as that of examination of account books.

"We have to improve the standard of reporting, the standard of examination. If in financial reporting you are not able to bring in integrity, then how will you do it in non-financial reporting that is the issue," he said, adding this issue is a matter of "concern".

When asked if RBI was also responsible for the problem in reporting standards, he said, "We are all collectively responsible. The issue is what went wrong and how do we improve the system.I don't think standard has any problem. Integrity of information is a problem, not the standard."

(Agencies)