1. We have audited the accompanying standalone financial
statements of IndusInd Bank Limited ('the Bank'), which
comprise the Standalone Balance Sheet as at March 31,
2026, and the Standalone Profit and Loss Account, and the
Standalone Cash Flow Statement for the year then ended,
and notes to the standalone financial statements, including
a summary of significant accounting policies and other
explanatory information (together to be referred to as
"standalone financial statements").
2. I n our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone financial statements give the information
required by Section 29 of the Banking Regulation Act, 1949
as well as the Companies Act, 2013 (the 'Act') and circulars
and guidelines issued by the Reserve Bank of India, in the
manner so required for banking companies ('RBI Guidelines')
and give a true and fair view in conformity with the
accounting principles generally accepted in India, including
the Accounting Standards prescribed under section 133 of
the Act, read with Companies (Accounting Standards) Rules,
2021 as amended to the extent applicable, of the state of
affairs of the Bank as at March 31, 2026, 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 SAs are further
described in the Auditor's Responsibilities for the Audit of
the standalone 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 standalone 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 obtained by us is sufficient
and appropriate to provide a basis for our opinion on the
standalone financial statements.
Emphasis of Matter
4. We draw attention to note 21.1 to the standalone financial
statements, which explains the status of matters related
to accounting of derivatives, interest and fee income and
other assets and other liabilities and subsequent steps
to strengthen the systems, process and related controls
pertaining to the aforesaid areas and necessary steps to fix
accountability and disciplinary action against concerned
officials in these matters.
Our opinion on the standalone financial statements is not
modified with respect to the above matter.
Key Audit Matters
5. Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements for the year ended March
31, 2026. These matters were addressed in the context of
our audit of the standalone 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 to be communicated in our report.
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Key Audit Matters (KAM)
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How KAM was addressed in our Audit
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Management Override of Controls
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During the previous financial year, investigations/reviews initiated
by the Bank towards end of the year identified instances of
override of key internal controls by senior management, including
key management personnel, resulting in control gaps and material
accounting adjustments including prior period adjustments,
which were given effect in the previous financial year. During the
current financial year, the Bank initiated corrective steps for the
identified discrepancies relating to control gaps.
Considering the significance of the matters identified in the
previous financial year, the inherent risk of management override
of controls, we have continued to consider management override
of controls as a Key Audit Matter for the financial year ended
March 31,2026.
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Our audit procedures included, but were not limited to the
following:
• Perused the Board and Audit Committee meetings minutes
to understand management and governance response to the
control gaps identified during the previous year and recurrence
thereof, if any, in the current year
• Obtained a copy of the investigation/ review reports and verified
whether the discrepancies noted therein have been rectified by
the Management through appropriate actions and controls,
including accounting implications if any, in the standalone
financial statements as per the applicable Accounting Standards.
• Reviewed the effectiveness of additional controls implemented
by the Management on assessed control gaps including
automation of certain processes, based on the findings in the
external forensic investigation report and internal investigation
reports. Further, we have noted that said gaps are also validated
for closure by the Internal Audit Department of the Bank and
external agency.
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Key Audit Matters (KAM)
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How KAM was addressed in our Audit
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• Performed necessary audit procedures including test of details
in response to the assessed risks.
• Performed journal entry testing using specific risk-based criteria,
with specific focus on manual entries or involving high-risk
accounts to identify material misstatements, if any.
• Performed an independent reassessment of the valuation of
derivatives.
• Perused the confirmations obtained by the Bank from the heads
of the various functions/areas within the Bank on verification
of certain aspects including reconciliations, with respect to the
financial reporting to mitigate the risk arising from potential
management override of controls.
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Identification and Provisioning of non-performing advances (NPA)
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Total Loans and Advances (Net of Provision) as at 31 March 2026 -
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INR 3,15,87,13,876 (Amount in 000')
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NPA as at 31 March 2026 - INR 11,09,53,469 (Amount in 000')
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Provision for NPA as at 31 March 2026 - INR 7,92,59,654 (Amount in 000')
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(Refer Schedule 9, Schedule 17(6) and Schedule 18 (4.1), (14.5) to the standalone financial statements)
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RBI guidelines on Income Recognition and Asset Classification and
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Our audit procedures included, but were not limited to the
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Provisioning pertaining to advances ('IRACP norms') prescribe the
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following:
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prudential guidelines for identification and classification of NPAs
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and the minimum provision required for such advances from time
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• Obtained an understanding of, evaluated and tested the
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to time and other relevant circulars, notifications and directives
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design and operating effectiveness of key controls (including IT
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issued by the RBI which were collectively considered by the Bank
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systems/application controls) around identification of NPA and
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till March 31, 2026 to classify its advances into performing and
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provisioning thereon based on the extant IRACP norms on a test
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non performing and make appropriate provisions thereon.
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check basis.
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The Bank, as per its NPA Policy, made the provision on performing
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• Verified on sample basis, the Days Past Due, including their date
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advances and NPA based on Management's assessment of the
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of NPA identification, classification and adequacy of provisioning
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degree of impairment of the advances subject to and guided by
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basis collateral valuations and other qualitative information
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minimum provisioning levels prescribed under the relevant RBI
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available.
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guidelines. Additionally, the Bank makes accelerated provision on
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exposures that are not classified as NPA where stress is identified
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• Reviewed controls over calculations of provision on non-
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by the Bank for such borrowers.
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performing advances, basis the provisioning norms, in
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As the identification of NPA and provisioning thereon requires
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accordance with the Board approved policy, keeping in view
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considerable level of management estimation, application of
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the requirement of IRACP norms.
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various regulatory requirements and its significance to the overall
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• Made inquiries with the Credit and Risk departments to ascertain
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audit, we have identified this as a Key Audit Matter.
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how various Early Warning Signal (EWS) and potential defaults
have been identified and assessed in identification of NPA/
stressed accounts.
• Obtained an understanding of the accelerated provision made
by the Bank and reviewed the underlying assumptions used by
the Bank for such performing stressed loan accounts/portfolio
of loan accounts.
• Performed credit assessments of sample loans showing signs
of deterioration, or in areas of emerging risk (assessed against
external market conditions).
• Assessed the appropriateness, accuracy and adequacy of the
related presentation and disclosures in accordance with the
applicable accounting standards and requirements of RBI with
respect to NPAs in the standalone financial statements.
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Key Audit Matters (KAM)
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How KAM was addressed in our Audit
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Information Technology (IT) Systems and Controls
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The Bank has a complex IT architecture to support its day-to-
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• Our Audit procedures with respect to this matter included:
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day business operations. The volume of transactions processed
and recorded is huge. Moreover, a transaction may be required
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• Involvement of IT audit specialists as an integral part of our
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to be recorded across multiple applications depending upon the
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engagement team to obtain an understanding of the IT
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process and each application has different rules and a different set
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architecture, which includes IT environment, IT infrastructure
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of user access and authority matrix.
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and IT systems.
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All these applications are not fully customized to take care of
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• We gathered an understanding of IT applications landscape
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all user's requirements. These applications are interlinked using
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implemented at the Bank and changes made therein during
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different technologies so that data transfer takes place on real
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the year. It was followed by process understanding, mapping of
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time basis or at a particular time during the day; in batches or at
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applications to the same and understanding financial risks posed
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a transaction level and in an automated manner or manually. The
Core Banking Solution (CBS) itself has many interfaces. All these
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by people, process and technology.
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data streams directly affect the financial accounting and reporting
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• In IT General Control testing, on sample basis, we reviewed control
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process of the Bank.
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areas such as User Management, Change Management, Systems
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The Bank has a process for identifying the applications where the
controls are embedded. The Bank's IT control framework includes
automated, semi-automated and manual controls designed to
address identified risks.
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Security, cyber security, interface testing, deployment of new
applications, Incident Management, Physical & Environmental
Security, Backup and Restoration, Business Continuity and Disaster
Recovery, Service Level Agreement, end of day operations, various
submission made to the regulator under risk based supervision.
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We have identified IT systems and controls Framework as a Key
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Audit Matter as the Bank's business is highly dependent on
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• We carried out on sample basis, compliance tests of system
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technology, high level of automation, significant number of
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functionality in order to assess the accuracy thereof. We
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systems being used, the IT environment is complex, and the
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also carried out procedures to check effectiveness of certain
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design and operating effectiveness of IT controls have a direct
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automated controls, that were considered as key internal system
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impact on its financial reporting process. Review of these systems
and controls is the basis for us to provide assurance on the
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controls over financial reporting.
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integrity and completeness of data processed through various IT
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• We tested the control environment using various techniques
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applications which are used for financial accounting & reporting.
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such as inquiry, walkthroughs in live environment, review
of documentation / record / reports, observation and re¬
performance. We also tested few controls using negative testing
technique and verified compensating controls and performed
alternate procedures, where necessary.
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Information Other than the Standalone Financial
Statements and Auditors' Report Thereon
6. The Bank's Management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the Bank's Annual
report but does not include the standalone financial
statements and our auditors' report thereon. The Annual
Report is expected to be made available to us after the date
of this auditors' report.
7. Our opinion on the standalone financial statements does not
cover the other information and we do not express any form
of assurance conclusion thereon.
8. I n connection with our audit of the standalone 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 standalone financial statements, or our
knowledge obtained in the audit, or otherwise appears to be
materially misstated.
9. 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 Standalone Financial
Statements
10. The Bank's Management and 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 standalone 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 Companies (Accounting Standards) Rules, 2021
as amended to the extent applicable, and RBI Guidelines.
This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the
Act, Banking Regulation Act, 1949 and RBI Guidelines 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
standalone financial statements that give a true and fair view
and are free from material misstatement, whether due to
fraud or error.
11. In preparing the standalone financial statements, the
Management and 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 the
Board of Directors either intends to liquidate the Bank or to
cease operations, or has no realistic alternative but to do so.
12. The Board of Directors is also responsible for overseeing the
Bank's financial reporting process.
Auditors' Responsibilities for the Audit of the
Standalone Financial Statements
13. Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditors' 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 standalone
financial statements. As part of an audit in accordance
with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatement
of the standalone 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.
b. 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 standalone financial
statements in place and the operating effectiveness of
such controls.
c. Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management in the
standalone financial statements.
d. Conclude on the appropriateness of the Board of
Directors and 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 auditors' report
to the related disclosures in the standalone 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 auditors'
report. However, future events or conditions may cause
the Bank to cease to continue as a going concern.
e. Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
14. 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.
15. 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.
16. From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
for the year ended March 31, 2026 and are therefore, the key
audit matters. We describe these matters in our auditors'
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
17. The audit of standalone financial statements for the
year ended March 31, 2025 was conducted by one of
the predecessor joint statutory auditors and one of the
current joint statutory auditors of the Bank, who expressed
an unmodified opinion on those standalone financial
statements vide their report dated May 21,2025. Our opinion
on the standalone financial statements is not modified in
respect of this matter.
Report on Other Legal and Regulatory Requirements
18. In our opinion, the Standalone Balance Sheet and the
Standalone 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 and relevant
rules issued thereunder.
19. As required by sub-section (3) of section 30 of the Banking
Regulation Act, 1949, 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 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; and
c. since the key operations of the Bank are automated with
the key applications integrated to the core banking
systems, the audit is carried out centrally as all the
necessary records and data required for the purposes of
our audit are available therein. Nevertheless, as part of
our audit, we have visited 49 branches to examine the
records maintained at such branches and performed
relevant audit procedures.
20. As required by Section 143(3) of the Act, based on our audit,
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 the paragraph 21(h) below on reporting under
Rule 11 (g);
c. The Standalone Balance Sheet, the Standalone Profit
and Loss Account and the Standalone Cash Flow
Statement dealt with by this Report are in agreement
with the books of account;
d. In our opinion, the aforesaid standalone financial
statements comply with the Accounting Standards
specified under Section 133 of the Act, read with
relevant rules thereunder, to the extent they are not
inconsistent with the applicable circulars, directions
and guidelines prescribed by the RBI;
e. On the basis of the written representations received
from the directors and taken on record by the Board
of Directors, none of the directors is disqualified as on
March 31, 2026 from being appointed as a director in
terms of Section 164(2) of the Act;
f. With respect to the maintenance of accounts and other
matters connected therewith, reference is made to
our comment in paragraph 20(b) above on reporting
under Section 143(3)(b) and paragraph 21(h) below on
reporting under Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014 (as amended);
g. With respect to the adequacy of the internal financial
controls with reference to standalone financial
statements of the Bank and the operating effectiveness
of such controls, refer to our separate Report in
'Annexure A';
21. 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, in our opinion and to the
best of our information and according to the explanations
given to us:
a. The Bank has disclosed the impact of pending litigations
on its financial position in its standalone financial
statements - Refer schedule 12, 17(17) and 18(15.3) to
the standalone financial statements;
b. The Bank has made provision, as required under the
applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts
including derivative contracts - Refer schedule 17(5),
17(17), 18(3), 18(4.1) and 18(15.3) to the standalone
financial statements;
c. There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Bank during the financial
year ended March 31, 2026 - Refer schedule 18(15.5);
d. The Management has represented that, to the best of
it's knowledge and belief, other than as disclosed in
the schedule 18(15.15)(1) to the standalone 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 persons or entities, including foreign
entities ('Intermediaries'), with the understanding,
whether recorded in writing or otherwise, that the
Intermediary shall, 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;
e. The Management has represented, that, to the best of
it's knowledge and belief, other than as disclosed in
the schedule 18(15.15)(2) to the standalone financial
statements, no funds have been received by the Bank
from any persons or entities, including foreign entities
('Funding Parties'), with the understanding, whether
recorded in writing or otherwise, that the Bank shall,
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
f. Based on the audit procedures performed that have
been considered reasonable and appropriate in the
circumstances, and according to the information and
explanations provided to us by the Management in this
regard, nothing has come to our notice that has caused
us to believe that the representations under sub-clause
(a) and (b) of Rule 11(e) as provided under (a) and (b)
above, contain any material misstatement.
g. The dividend declared during the year by the Bank is in
compliance with Section 123 of the Act; and
h. Based on our examination which included test checks,
the Bank has used accounting software for maintaining
its books of account (including two accounting
software managed and maintained by a third-party
software service provider), which have a feature of
recording the audit trail (edit log) facility, except that as
explained in schedule 18(22) to the standalone financial
statements, where the audit trail feature was enabled
at the database level in respect of one accounting
software with effect from June 13, 2025 and another
with effect from June 17, 2025.
Further, where enabled, the audit trail feature has
operated for all relevant transactions recorded in the
accounting software throughout the year, except for
two software as explained in previous para. Also, during
the course of our audit and considering SOC reports, we
did not come across any instance of audit trail feature
being tampered with in respect of such accounting
software. Additionally, the audit trail wherever
maintained, has been preserved by the Bank as per the
statutory requirements for record retention from April
1, 2023, except that the logs related to database level
changes, have been retained from April 1, 2024.
i . 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 Chokshi & Chokshi LLP For Borkar & Muzumdar
Chartered Accountants Chartered Accountants
ICAI Firm's Registration No. 101872W / W100045 ICAI Firm's Registration No. 101569W
Vineet Saxena Brijmohan Agarwal
Partner Partner
ICAI Membership No. 100770 ICAI Membership No. 033254
UDIN: 261007700C0FDG4402 UDIN: 26033254RCTMEJ9054
Place: Mumbai Place: Mumbai
Date: April 24, 2026 Date: April 24, 2026
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