1. We have audited the accompanying financial
statements of Bandhan Bank Limited (the
"Bank") which comprise the Balance Sheet as at
March 31, 2025, the Profit and Loss Account, the Cash
Flow Statement for the year then ended, and notes
to the Financial Statements including a summary of
significant accounting policies and other explanatory
information ("the Financial Statements").
2. I n our opinion and to the best of our information
and according to the explanations given to us, the
aforesaid financial statements give the information
required by the Banking Regulation Act, 1949 as well as
the Companies Act, 2013 ("the Act") and the circulars
and guidelines issued by Reserve Bank of India, in the
manner so required for banking companies and are in
conformity with the accounting principles generally
accepted in India including the accounting standards
specified under Section 133 of the Act as applicable
to banks and give a true and fair view of the state of
affairs of the Bank as at March 31, 2025, and its profit
and its cash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards
on Auditing (SAs) specified under Section 143(10) of
the Act. Our responsibilities under those Standards
are further described in the "Auditor's Responsibilities
for the Audit of Financial Statements" section of our
report. We are independent of the Bank in accordance
with the Code of Ethics issued by the Institute of
Chartered Accountants of India ('ICAI') together with
the ethical requirements that are relevant to our audit
of the Financial Statements under the provisions of the
Act and the Rules thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key audit matters
4. Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the Financial Statements of the current
year. These matters were addressed in the context of
our audit of the Financial Statements as a whole and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined
the matters described below to be the key audit matters:
Identification and Provisioning of Non-performing Advances (NPA):
Total NPA as at March 31, 2025: ?6,435.56 crore
Provision for NPA as at March 31, 2025: ?4,742.71 crore
(Refer Schedule 9, 18.6 & 18.7 to the Financial Statements)
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Key Audit Matter
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How our audit addressed the key audit matter
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Identification of NPA and measurement of provision
on account of NPA is made based on the assessment
of various criteria stipulated in the Reserve Bank of
India ('RBI') guidelines on 'Prudential Norms on Income
Recognition, Asset Classification and Provisioning
pertaining to advances' ('IRACP').
The Bank is also required to apply its judgement to
determine the identification and provision required against
NPAs by applying quantitative as well as qualitative factors.
The risk of identification of NPAs is affected by factors like
stress and liquidity concerns in certain sectors.
The provision against advances is based on criteria such
as past due status, out of order status etc. The provision
in respect of such NPAs are made based on ageing and
classification of NPAs, recovery estimates, value of
security, nature of loan products and other qualitative
factors and is subject to minimum provisioning levels
prescribed by the RBI and approved policy of the bank
in this regard. In addition to this, for restructured
accounts, provision is made for erosion/ diminution in fair
value of restructured loans, in accordance with the RBI
guidelines. Further, NPA classification is made borrower
wise whereby if one facility of the borrower becomes
NPA then all facilities of such a borrower will be treated
as NPA.
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• Tested the design and operating effectiveness of key controls
(including application controls) over approval, recording,
monitoring, and recovery of loans, monitoring overdue/
stressed accounts, identification of NPA, provision for NPA,
and valuation of security including collateral. Testing of
Application controls includes testing of automated controls,
reports and system reconciliations.
• Evaluated the governance process and tested controls over
calculations of provision on non-performing advances, basis
of provisioning in accordance with the Board approved policy.
• Selected the borrowers based on quantitative and qualitative
risk factors for their assessment of appropriate classification
as NPA including computation of overdue ageing to assess its
correct classification and provision amount as per the IRACP
norms and Bank policy.
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Key Audit Matter
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How our audit addressed the key audit matter
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We have identified 'Identification of NPA and
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Performed other substantive procedures including but not
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Provisioning on Advances' as a key audit matter in view of
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limited to the following:
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the significant level of estimation involved, as well as the
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• Selected sample of performing loans and assessed them
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stringent compliances laid down by the RBI in this regard.
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independently as to whether these should be classified
as NPA;
• For sample selected, examined the security valuation,
financial statements and other qualitative information of
the borrowers;
• Considered the accounts reported by the Bank and other
Banks as Special Mention Accounts ("SMA") in RBI's Central
Repository of Information on Large Credits (CRILC) to
identify stress;
• Performed inquiries with the credit and risk departments to
ascertain if there were indicators of stress or an occurrence of
an event of default in a particular loan account or any product
category which needs to be considered as NPA;
• Assessed the appropriateness of asset classification and
adequacy of related provisioning by performing procedures
such as computation of overdue ageing, assessment of
borrower level, NPA identification and verification of
applicable provision rates as per IRACP norms and Bank's
Policy on test check basis; and assessed the adequacy of
disclosures against the relevant accounting standards and
RBI requirements relating to NPAs.
• We communicated the observations arising out of our
above procedures with those charged with governance
and the management. The resultant modifications in IT
procedures to improve financial and operating controls have
been implemented or expected to be implemented in the
near future. In the meanwhile, the management has made
compensating computations through specific manual or
other off system exercises to which we have applied audit
tests, where necessary.
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Information Technology ("IT") Systems and Controls impacting Financial Reporting
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Key Audit Matter
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How our audit addressed the key audit matter
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The Bank has a complex IT architecture to support its day-
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Our procedures with respect to this matter included the
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to-day business operations. High volume of transactions are
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following:
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processed and recorded on single or multiple applications.
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In assessing the controls over the IT systems of the Bank, we
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The reliability and security of IT systems plays a key role in
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involved our technology specialists to obtain an understanding of
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the business operations of the Bank. Since large volume of
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the IT environment, IT infrastructure and IT systems. We evaluated
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transactions are processed daily, the IT controls are required
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and tested relevant IT general controls over the "in-scope" IT
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to ensure that applications process data as expected and
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systems and IT dependencies identified as relevant for our audit
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that changes are made in an appropriate manner.
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of the financial statements and financial reporting process of the
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Appropriate IT general controls and application controls
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Bank. On such "in-scope" IT systems, we have tested key IT general
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are required to ensure that such IT systems are able to
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controls with respect to the following domains:
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process the data, as required, completely, accurately and
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• Program change management, which includes that program
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consistently for reliable financial reporting.
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changes are moved to the production environment as per
defined procedures and relevant segregation of environment
is ensured.
• User access management, which includes user access
provisioning, de-provisioning, access review, password
management, sensitive access rights and segregation of duties
to ensure that privilege access to applications, operating
systems and databases in the production environment were
granted only to authorised personnel.
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Key Audit Matter
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How our audit addressed the key audit matter
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We have identified 'IT systems and controls' as key audit
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• Program development, which includes controls over IT
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matter because of the high level automation, significant
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application development or implementation and related
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number of systems being used by the management and
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infrastructure, which are relied upon for financial reporting.
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the complexity of the IT architecture and its impact on
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In addition, understood where relevant, changes made to the
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the financial reporting system.
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IT landscape during the audit period.
• IT operations, which includes job scheduling, monitoring and
backup and recovery.
We also evaluated the design and tested the operating
effectiveness of relevant key IT dependencies within the
key business process, which included testing automated
controls, automated calculations/ accounting procedures,
interfaces, segregation of duties and system generated reports,
as applicable.
We communicated the observations arising out of our above
procedures with those charged with governance and the
management. The resultant modifications in IT Procedures
to improve financial and operating controls have been
implemented or expected to be implemented in the near future.
In the meanwhile, the management has made compensating
computations through specific manual or other off system
exercises to which we have applied audit tests, where necessary.
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Information other than financial statements and
auditors' report thereon
5. The Bank's Board of Directors are responsible for the
other information. The other information comprises
the information included in the annual report but
does not include the Financial Statements and
our auditor's report thereon. The annual report is
expected to be made available to us after the date of
this auditor's report.
Our opinion on the Financial Statements does not
cover the other information and we will not express
any form of assurance conclusion thereon.
In connection with our audit of the Financial
Statements, our responsibility is to read the other
information identified above when it becomes
available and, in doing so, consider whether the other
information is materially inconsistent with the Financial
Statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. When
we read the annual report, if we conclude that there
is a material misstatement therein, we are required
to communicate the matter to those charged with
governance and take appropriate action as applicable
under the relevant laws and regulations.
Responsibilities of management and those
charged with governance for the
Financial Statements
6. The Bank's Board of Directors are responsible for
the matters stated in Section 134(5) of the Act,
with respect to the preparation and presentation of
these Financial Statements that give a true and fair
view of the financial position, financial performance
and cash flows of the Bank in accordance with the
accounting principles generally accepted in India,
including the Accounting Standards specified under
Section 133 of the Act read with the Companies
(Accounting Standards) Rules, 2021, and the provisions
of Section 29 of the Banking Regulations Act, 1949
and circulars, guidelines and directions issued by
the Reserve Bank of India ("RBI") from time to time.
This responsibility also includes maintenance of
adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets
of the Bank and for preventing and detecting frauds
and other irregularities; selection and application of
appropriate accounting policies; making judgments
and estimates that are reasonable and prudent;
and design, implementation and maintenance of
adequate internal financial controls, that were
operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant
to the preparation and presentation of the Financial
Statements that give a true and fair view and are free
from material misstatement, whether due to fraud
or error.
In preparing the Financial Statements, the Board of
Directors are responsible for assessing the Bank's
ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and
using the going concern basis of accounting unless
management and Board of Director either intends to
liquidate the Bank or to cease operations, or has no
realistic alternative but to do so.
The Board of Directors are also responsible for
overseeing the Bank's financial reporting process.
Auditor's Responsibilities for the Audit of the
Financial Statements
8. Our objectives are to obtain reasonable assurance
about whether the Financial Statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee
that an audit conducted in accordance with SAs will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these Financial Statements.
9. As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the Financial Statements, whether due to fraud
or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3)
(i) of the Act, we are also responsible for expressing
our opinion on whether the Bank has internal financial
controls with reference to the Financial Statements in
place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management of
the Bank.
• Conclude on the appropriateness of management's use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions
that may cast significant doubt on the Bank's ability
to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to
draw attention in our auditor's report to the related
disclosures in the Financial Statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future
events or conditions may cause the Bank to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and
content of the Financial Statements, including the
disclosures, and whether the Financial Statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
10. We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
11. We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and
to communicate with them all relationships and
other matters that may reasonably be thought to
bear on our independence, and where applicable,
related safeguards.
12. From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the Financial
Statements of the current year and are therefore the
key audit matters. We describe these matters in our
auditor's report unless law or regulation precludes
public disclosure about the matter or when, in
extremely rare circumstances, we determine that a
matter should not be communicated in our report
because the adverse consequences of doing so
would reasonably be expected to outweigh the public
interest benefits of such communication.
Other Matters
13. The financial statements of the Bank for the year ended
March 31, 2024 were jointly audited by Singhi & Co.
and M M Nissim & Co. LLP, who vide their audit report
dated May 17, 2024 issued an unmodified opinion
on the audited financial statements. Accordingly,
V. Sankar Aiyar & Co., do not express any opinion
on the comparable figures reported in the financial
statements for the year ended March 31, 2024.
Our opinion is not modified in respect of the
above matter.
Report on other legal and regulatory requirements
14. In our opinion, the Balance Sheet and the Profit and
Loss Account have been drawn up in accordance with
the provisions of Section 29 of the Banking Regulation
Act, 1949 and Section 133 of the Act.
15. As required by sub-section (3) of Section 30 of the
Banking Regulation Act, 1949, we report that:
(a) we have obtained all the information and
explanations which, to the best of our knowledge
and belief, were necessary for the purpose of our
audit and have found them to be satisfactory;
(b) the transactions of the Bank, which have come
to our notice, have been within the powers of
the Bank;
(c) Since the key operations of the Bank are
automated with the key applications integrated
to the core banking system, the audit is carried
out centrally at the Bank's Head Office located
in Kolkata, as all the necessary records and
data required for the purposes of our audit are
available there. During the course of our audit,
we have visited 20 branches and 24 banking
units to examine the books of account and other
records maintained at the branch and performed
other relevant audit procedures.
16. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit;
(b) In our opinion, proper books of account as
required by law have been kept by the Bank so
far as it appears from our examination of those
books, except for the matters stated in paragraph
16(h)(vi) below on reporting under Rule 11(g) of
the Companies (Audit and Auditors) Rules, 2014
(as amended) ("the Rules");
(c) The Balance Sheet, the Profit and Loss Account
and the Cash Flow Statement dealt with by
this report are in agreement with the books
of account;
(d) In our opinion, the aforesaid Financial Statements
comply with the Accounting Standards specified
under Section 133 of the Act read with Companies
(Accounting Standards) Rules 2021, to the extent
they are not inconsistent with the guidelines
prescribed by RBI;
(e) On the basis of the written representations
received from the directors as on March 31, 2025
and taken on record by the Board of Directors,
none of the directors is disqualified as on March
31, 2025 from being appointed as a director in
terms of Section 164(2) of the Act;
(f) The modifications relating to the maintenance of
accounts and other matters connected therewith,
reference is made to our remarks in paragraph
16(b) above on reporting under Section 143(3)
(b) of the act and paragraph 16(h)(vi) below on
reporting under Rule 11 (g) of the Rules;
(g) With respect to the adequacy of the internal
financial controls with reference to Financial
Statements of the Bank and the operating
effectiveness of such controls, refer to our
separate report in "Annexure A"; and
(h) With respect to the other matters to be included
in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules,
2014 (as amended), in our opinion and to the
best of our information and according to the
explanations given to us:
i. The Bank has disclosed the impact of
pending litigations on its financial position
in its Financial Statements - Refer Schedule
12 & 18.17 to the Financial Statements;
ii. The Bank did not have any long term contract
including derivative contracts for which
there were material foreseeable losses;
iii. There has been no delay in transferring
amounts, required to be transferred, to
the Investor Education and Protection
Fund by the Bank, during the year ended
March 31, 2025;
iv. (a) The management has represented that,
to the best of its knowledge and belief,
other than as disclosed in the Schedule
18.34 to the Financial Statements, no
funds have been advanced or loaned or
invested (either from borrowed funds
or share premium or any other sources
or kind of funds) by the Bank to or in any
other person(s) or entity(ies), including
foreign entities ("Intermediaries"), with
the understanding, whether recorded
in writing or otherwise, that the
Intermediary shall, whether, directly or
indirectly, lend or invest in other persons
or entities identified in any manner
whatsoever by or on behalf of the Bank
("Ultimate Beneficiaries") or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries;
(b) The management has represented that,
to the best of its knowledge and belief,
other than as disclosed in the Schedule
18.34 to the Financial Statements,
no funds have been received by the
Bank from any person(s) or entity(ies),
including foreign entities ("Funding
Parties"), with the understanding,
whether recorded in writing or
otherwise, that the Bank shall, whether,
directly or indirectly, lend or invest in
other persons or entities identified
in any manner whatsoever by or on
behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any
guarantee, security or the like on behalf
of the Ultimate Beneficiaries; and
(c) Based on such audit procedures that we
considered reasonable and appropriate
in the circumstances; nothing has
come to our notice that has caused
us to believe that the representations
under sub-clause (a) and (b) contain any
material misstatement.
v. (a) The final dividend proposed in the
Previous Year, declared and paid by the
bank during the year is in accordance
with the Section 123 of the Act, as
applicable; and
(b) As stated in Schedule 18.3 to the
Financial Statements, the Board of
Directors of the Bank have proposed
dividend for the financial year 2024¬
25 which is subject to the approval of
the members at the ensuing Annual
General Meeting. The amount of
dividend proposed is in accordance with
Section 123 of the Act, as applicable,
until the date of this report.
vi. Based on our examination, which included
test checks, the Bank has used various
accounting software for maintaining its
books of account which have a feature
of recording audit trail (edit log) facility,
which have operated throughout the year
for all relevant transactions recorded in the
software, except;
(a) the audit trail configured at Database
level logs record only modified values in
respect of two accounting software(s).
Further, for one of these applications,
the changes to capture pre-modified
values was implemented from
March 25, 2025.
(b) the audit trail to log any direct data
changes was enabled at database level
in case of one accounting software,
from May 25, 2024.
Based on our procedures performed,
we did not observe any instance of
tampering with the audit trail except
in respect of periods and systems as
mentioned above wherein we are
unable to comment upon in absence
of audit trails. Further, the audit
trail, to the extent maintained in the
prior year, has been preserved by
the Company as per the statutory
requirements for record retention
except in case of two sunset software
discontinued during Previous Year and
one accounting software wherein audit
trail was enabled at database level
from February 18, 2024.
7. I n our opinion and to the best of our information
and according to the explanations given to us,
the provisions of Section 197 of the Act are not
applicable to the Bank by virtue of Section 35B(2A)
of the Banking Regulation Act, 1949. Accordingly, the
reporting under Section 197(16) of the Act regarding
payment/ provision for managerial remuneration in
accordance with the requisite approvals mandated by
the provisions of Section 197 read with Schedule V to
the Act, is not applicable.
For Singhi & Co. For V. Sankar Aiyar & Co.
Chartered Accountants Chartered Accountants
(Firm Registration No. 302049E) (Firm Registration No. 109208W)
Ravi Kapoor Karthik Srinivasan
Partner Partner
Membership No. 040404 Membership No. 514998
UDIN: 25040404BMLAOP6295 UDIN: 25514998BMLGKR9919
Place: Kolkata Place: Kolkata
Date: April 30, 2025 Date: April 30, 2025
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