1. We have audited the accompanying Standalone Financial
Statements of Punjab National Bank (the Bank), which
comprise the Balance Sheet as at 31st March 2025, the Profit
and Loss Account and the Statement of Cash Flow for the
year then ended, and notes to financial statements including
a summary of significant accounting policies and other
explanatory information in which are included the returns for
the year ended on that date of the Central Office, 22 Zonal
Offices and
i. 20 branches, Treasury division, Credit Card division and
39 other offices audited by us.
ii. 1984 Indian branches and other offices audited by
statutory branch auditors.
iii. 1 foreign branch audited by local auditors.
iv. 1 International Banking Unit situated at Gujarat
International Finance Tec-City (Gift City) audited by
Statutory Branch Auditors.
The branches audited by us and those audited by other
auditors have been selected by the Bank in accordance with
the guidelines issued to the Bank by the Reserve Bank of
India. Also incorporated in the Balance Sheet, the Profit and
Loss Account and the Statement of Cash Flows are the returns
from 9290 branches which have not been subjected to audit.
These unaudited branches account for 24.31% of advances,
55.76 % of deposits, 18.74% of interest income and 51.09% of
interest expenses.
2. In 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 the
Banking Regulation Act, 1949 in the manner so required for
bank and are in conformity with accounting principles generally
accepted in India and:
a. The Balance Sheet, read with the notes thereon is a
full and fair Balance Sheet containing all the necessary
particulars, is properly drawn up so as to exhibit a true
and fair view of the state of affairs of the Bank as at 31st
March, 2025;
b. The Profit and Loss Account, read with the notes thereon
shows a true balance of profit for the year ended on that
date and
c. The Statement of Cash Flow gives a true and fair view of
the 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) issued by the Institute of Chartered Accountants
of India (ICAI). Our responsibilities under those Standards 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 together with ethical requirements that are relevant
to our audit of the Standalone financial statements 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
standalone financial statements for the year ended 31st
March 2025. 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 prescribed below to be the key audit matters to be
communicated in our report.
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Key Audit Matters
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How our matter was addressed
in the audit
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Advances - classification and
provisioning
(Refer Schedule 9. to the Standalone
Financial Statements, read with the
Accounting Policy No 5)
The advances are classified as
performing and non-performing
advances (NPA) and provisioning
thereon is made in accordance with
the prudential norms as prescribed
by the Reserve Bank of India
(RBI). The Bank has implemented
complete system driven recognition
of advances and their classification
in SASCL Application under Core
Banking Solution (CBS). The extent
of provisioning of NPA under the
prudential norms are mainly based
on its ageing and recoverability of
the underlined security. The same
are also reviewed manually based
on necessity.
In the event of any improper
application of the prudential norms
or consideration of the incorrect
value of the security, as the valuation
of the security involves high degree
of estimation and judgement, the
carrying value of the advances
could be materially misstated
either individually or collectively,
and in view of the significance of
the amount of advances in the
Standalone Financial Statements
the classification of the advances
and provisioning thereon has been
considered as Key Audit Matter in
our audit.
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Our audit approach towards
advance included an understanding
of the Bank's software, circulars,
guidelines and directives of the
Reserve Bank of India and the
Bank's internal instructions and
procedures in respect of the assets
classification and its provisioning
on sample basis and adopted the
following audit procedures:
• Examined on test check basis
the efficacy of various internal
controls over advances to
determine the nature, timing
and extent of the substantive
procedures and compliance
with the observations of the
various audits conducted as
per the monitoring mechanism
of the Bank and RBI Inspection
with respect to income
recognition, asset classification
.and provisioning pertaining to
these advances.
• Reviewed the Bank's monitoring
mechanisms to identify errors
and omission in applying/
implementation of logic / data
integrity and its corrective
action.
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• In carrying out substantive
procedures at the branches
audited by us, we have
reviewed the documentations,
operations / performance and
monitoring of the advance
accounts, to ascertain any
overdue, unsatisfactory conduct
or weakness in any advance
account including, examination
of classification on sample basis
in compliance with the RBI
Master Circulars / Guidelines/
Judicial pronouncements
Reliance is also placed on
Audit Reports of other Statutory
Branch Auditors with whom
we have also made specific
communication.
• Reviewed the report of
independent IT Expert on
review of SASCL Application
(Income Recognition and Asset
Classification solution) used
by CBS including the review of
“Baseline Requirements for the
NPA classification Solution”.
Accordingly, we have assessed
and evaluated the process
of identification of NPAs and
corresponding reversal of
income and creation of provision
• Reviewed on test check basis
the reports of the credit audit,
inspection audit, risk based
internal audit, concurrent audit,
regulatory audit to ascertain
existence and effectiveness of
such monitoring mechanisms as
per the policies and procedures
of the Bank
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Investments - valuation and
identification and provisioning
for Non-Performing Investments
(Refer Schedule 8 to the Standalone
Financial Statements, read with the
Accounting Policy No 4)
Investment portfolio of the bank
comprises of Investments in
Government Securities, Bonds,
Debentures, Shares, Security
Receipts and other Approved
Securities which are classified
under three categories, Held to
Maturity (HTM), Available for Sale
(AFS) and Fair Value through Profit
or Loss (FVTPL)
Valuation of Investments,
identification of Non-performing
Investments (NPI) and the
corresponding non-recognition
of income and provision thereon,
is carried out in accordance with
the relevant circulars / guidelines /
directions of RBI.
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Our audit approach towards
Investments with reference to
the RBI circulars / directives
“included the review and testing
of the design, implementation,
operating effectiveness of internal
controls and audit procedures in
relation to valuation, classification,
identification of Non-Performing
Investments, provisioning /
depreciation related to Investments
as per RBI guidelines.
• We reviewed and evaluated the
' process adopted for collection
of information from various
sources for determining fair
value of these investments.
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The valuation of each category
(type) of aforesaid security is to be
carried out as per the methodology
prescribed in circulars and directives
issued by the RBI which involves
collection of data/ information from
various sources such as FIMMDA
rates, rates quoted on BSE/ NSE,
financial statements of unlisted
companies, NAV in case of mutual
funds & security receipts etc.
Certain investments are based
on the valuation methodologies
that include statistical models with
inherent assumptions, assessment
of price for valuation based on
financial statements etc.
Hence, the price discovered for
the valuation of these Investments
may not be the true representative
but only a fair assessment of the
Investments as on date. Hence the
valuation of Investments requires
special attention and further in view
of the significance of the amount
of Investments in the financial
statements the same has been
considered as Key Audit Matter in
our audit.
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• For the selected sample of
investments in hand, we tested
accuracy and compliance with
the RBI Master Circulars and
directions by re-performing
valuation for each category
of security. Samples were
selected after ensuring that all
the categories of investments
(based on nature of security)
were covered in the sample
• We assessed and evaluated
the process of identification
of NPIs, and corresponding
reversal of income and creation
of provision.
• We understood and reviewed
the methodology adopted by
the Bank for classification
of investments into various
categories as per RBI guidelines
• We carried out substantive
audit procedures to recompute
independently the provision to
be maintained and depreciation
to be provided in accordance
with the circulars and directives
of the RBI. Accordingly, we
selected samples from the
investments of each category
and tested for NPIs as per the
RBI guidelines and recomputed
the provision to be maintained
in accordance with the RBI
Circular for those selected
sample of NPIs
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Assessment of Information
Technology (IT):
IT controls with respect to recording
of transactions, generating various
reports in compliance with RBI
guidelines including IRAC norms.
Other regulatory compliances
is also an important part of the
process. Such reporting is highly
dependent on the effective working
of Core Banking Software and other
allied systems.
We have considered this as key
audit matter as any control lapses,
validation failures, incorrect input
data and wrong extraction of data
may result in wrong reporting of data
to the management and regulators
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Our audit approach included: -
• Understanding the coding
system adopted by the Bank
for various categories of
customers.
• Reviewed the design,
implementation and operating
effectiveness of the Bank's IT
, controls including application,
.access controls that are critical
to financial reporting on test
check basis.
• Understanding the feeding
of the data in the system and
going through the extraction of
the financial information and
statements from the IT system
existing in the Bank.
• Checking of the user
requirements for any changes
in the regulations/ policy of the
Bank.
• Reviewed the reports generated
^ by the system on sample basis.
• Reviewed ...-'the report of
independent IT Expert on
review of SASCL Application
(Income Recognition and Asset
Classification solution) used
by CBS including the review of
“Baseline Requirements for the
NPA classification Solution”.
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Litigation & Contingent Liabilities
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Our audit approach involved: -
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(Refer Schedule 12. to the
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• Obtaining an understanding of
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Standalone Financial Statements,
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internal controls relevant to the
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read with the Accounting Policy
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audit in order to design our audit
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No 12)
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procedures that are appropriate
in the circumstances;
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Assessment of Contingent liabilities
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• Going through the current
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in respect of certain litigations
including Direct and Indirect Taxes
and various other claims filed by
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status of the tax litigations and
contingent liabilities;
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other parties upon the Bank not
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• Examining the orders and/or
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acknowledged as debts.
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communication received from
various Tax Authorities/ Judicial
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The Bank’s assessment is
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forums and follow up action
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supported by the facts of
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thereon;
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matter, their own judgment, past
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• Evaluating the merits of
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experience, and advice from legal
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the subject matter under
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and independent tax consultants
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consideration with reference to
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wherever considered necessary.
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the grounds presented therein
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Accordingly, unexpected adverse
outcomes may significantly impact
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and available independent legal
/ tax advice; and
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the Bank's reported profit and the
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• Wherever required, reliance is
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Balance Sheet.
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placed on the opinion of legal
and tax consultants.
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We determined the above area
as a Key Audit Matter in view of
associated uncertainty relating to
the outcome of litigations which
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• Verification of disclosures
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related to significant litigations
and taxation matters.
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requires application of judgment in
interpretation of law.
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Accordingly, our audit was focused
on analysing the facts of subject
matter under consideration and
judgments/ interpretation of law
involved.
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Information Other than the Standalone Financial Statements
and Auditor’s Report thereon
5. The Bank's Board of Directors is responsible for preparation
of the other information. The other information comprises the
Directors' Report, including annexures, Corporate Governance
Report and other reports (but does not include the financial
statements and our auditor's report thereon). Our opinion on
the Standalone Financial Statements does not cover the other
information and we do not and will not express any form of
assurance conclusion thereon.
In connection with our audit of the Standalone Financial
Statements, our responsibility is to read the other information
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.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in
this regard.
Responsibilities of Management and Those Charged with
Governance for the Standalone Financial Statements
6. The Bank's Board of Directors is responsible with respect to
the preparation 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 applicable Accounting Standards issued by ICAI
to the extent applicable, and provisions of Section 29 of the
Banking Regulation Act, 1949 and circulars and guidelines
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
above mentioned 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 standalone financial statements that give
a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the Standalone Financial Statements,
management is 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 either intends to liquidate the
Bank or to cease operations, or has no realistic alternative but
to do so. Those Board of Directors are also responsible for
overseeing the Bank's financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone
Financial Statements
7. 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 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 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:
• 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.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
• 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.
Materiality is the magnitude of the misstatements in the
standalone financial statements that, individually or aggregate,
makes it probable that the economic decisions of a reasonably
knowledgeable user of the financial statements may be
influenced. We consider quantitative materiality and qualitative
factors in
(i) Planning of the scope of our audit work and in evaluating the
results of our work; and
(ii) To evaluate the effect of any identified misstatement in the
financial statements.
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. 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.
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 period 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
8. We did not audit the financial statements / information of 1984
branches and other offices, 1 foreign branch and 1 International
Banking Unit situated in Gujarat International Finance Tec-City
{Gift City) included in the standalone financial statements of
the Bank whose financial statements / financial information
reflect total assets of Rs. 3,53,931.58 crores as at 31st March
2025 and total revenue of Rs. 24,893.19 crores for the year
ended on that date, as considered in the standalone financial
statements. These branches and other offices and foreign
branches cover 25.48% of advances, 35.46% of deposits
and 36.08% of non-performing assets as at 31st March 2025
and 18.03% of revenue for the year ended 31st March 2025.
The financial statements / information of these branches has
been audited by the branch auditors whose reports have been
furnished to us, and our opinion in so far as it relates to the
amounts and disclosures included in respect of branches, is
based solely on the report of such branch auditors.
9. The Standalone Financial results of the Bank for the previous
year ended 31st March, 2024 were audited by the joint auditors,
two of them are predecessor audit firms and have expressed
unmodified opinion on such financial results vide report dated
May 9, 2024. Our opinion is not modified in respect of this
matter. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10. The Balance Sheet and the Profit and Loss Account have
been drawn up in accordance with Section 29 of the Banking
Regulation Act, 1949;
11. Subject to the limitations of the audit indicated in paragraphs
8 and 9 above and as required by the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970/1980,
and subject also to the limitations of disclosure required
therein, 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 purposes 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. The returns received from the offices and branches of the
Bank have been found adequate for the purposes of our
audit.
12. As required by letter No. DOS. ARG. No. 6270/08.91.001/
2019-20 dated 17th March 2020 on “Appointment of Statutory
Central Auditors (SCAs) in Public Sector Banks - Reporting
obligations for SCAs from FY 2019-20”, read with subsequent
communication dated 19 May 2020 issued by the RBI, we
further report on the matters specified in paragraph 2 of the
aforesaid letter as under:
a) In our opinion, the aforesaid Standalone Financial
Statements comply with the applicable Accounting
Standards issued by ICAI, to the extent they are not
inconsistent with the accounting policies prescribed by
the RBI.
b) There are no observations or comments on financial
transactions or matters which have any adverse effect on
the functioning of the Bank.
c) As the Bank is not registered under the Companies Act,
2013 the disqualification from being a director of the bank
under sub-section (2) of section 164 of the Companies
Act, 2013 do not apply to the Bank.
d) There are no qualifications, reservations or adverse
remarks relating to the maintenance of accounts and
other matters connected therewith.
e) Our audit report on the adequacy and operating
effectiveness of the Bank's internal financial controls over
financial reporting is given in Annexure A to this report.
Our report expresses an unmodified opinion on the
Bank's internal financial controls over financial reporting
as at 31st March 2025.
13. We further report that:
a. 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 and proper returns adequate for
the purposes of our audit have been received from branches/
offices not visited by us;
b. the Balance Sheet, the Profit and Loss Account and the
Statement of Cash Flow dealt with by this report are in
agreement with the books of account and with the returns
received from the branches/offices not visited by us.
c. The reports on the accounts of the branch/offices audited by
branch auditors of the Bank under section 29 of the Banking
Regulation Act, 1949 have been sent to us and have been
properly dealt with by us in preparing this report; and
d. In our opinion, the Balance Sheet, the Profit and Loss Account
and the Statement of Cash Flows comply with the applicable
accounting standards, to the extent they are not inconsistent
with the accounting policies prescribed by RBI.
For P S D & Associates
Chartered Accountants
,QVR,U: 0045011
FRN: 004501C
lunh y[iidij fuo
CA Abhinav Sharma
HiiXhnij
Partner
(mm 1 411219)
(M.No. 411219)
;Mhvib,U: 25411219BMOICE1886
UDIN: 25411219BMOICE1886
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