ICAI wants SBI to explain clean-up act

The Institute of Chartered Accountants of India (ICAI) will write to State Bank of India (SBI) in a week asking the country’s largest commercial bank to explain the high provisioning it made in the fourth quarter of the fiscal 2010-11. SBI’s huge provisioning resulted in a plunge in its net profit for the quarter and in its share price.

“We would like to know factual position about such high provisioning,” ICAI president G Ramaswamy told The Indian Express here. During the fourth quarter, SBI made a provision of Rs 3,263.9 crore against bad debts compared to Rs 2,186.7 crore in the same period a year ago, an increase of 49 per cent. The total provision for the full year was Rs 6,059 crore as against Rs 3,327 crore, showing a rise of 82.10 per cent. As a result, its net profit for Q4 nosedived by 98.8 per cent to Rs 20.88 crore against Rs 1,866.60 crore in the same quarter in the previous fiscal.