We have audited the standalone financial statements of YES
BANK Limited ('the Bank'), which comprise the Balance Sheet
as at March 31, 2026, the Profit and Loss Account and the
Cash Flow Statement for the year then ended, and notes to
the standalone financial statements, including a summary
of the significant accounting policies and other explanatory
information (hereinafter referred to as "standalone
financial statements").
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
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 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 the 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
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 ('the
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 we have obtained, is sufficient
and appropriate to provide a basis for our opinion on the
standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the
standalone financial statements of the current year.
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:
|
Key Audit Matters
|
Auditor's Response
|
|
Identification, classification and provisioning of Non-Performing Advances (NPA)
|
|
Refer to schedule 9, read with relevant Notes relating to provisions
|
Our audit approach included testing the design, operating
|
|
and contingencies, disclosures with regard Asset Quality in respect
|
effectiveness of internal controls and substantive audit procedures
|
|
of movement of Non-Performing Advances (NPAs) and related
|
in respect of identification, classification and provisioning of NPA. In
|
|
provisions respectively.
|
particular:
|
|
Following prudential norms on Income Recognition, Asset
|
• Evaluated the Bank's internal control system in adhering to the
|
|
Classification and Provisioning related to Advances read with relevant
|
relevant RBI guidelines and directions regarding identification,
|
|
circulars, notifications and directions issued by the Reserve Bank of
|
classification and provisioning of NPA;
|
|
India (RBI) the Bank has identified and classified Non-Performing
Advances as of March 31,2026 into Sub-standard, Doubtful and Loss
and has made appropriate provisions.
|
• Tested key IT systems/ applications used and their design and
|
|
implementation as well as operational effectiveness of relevant
controls, including involvement of manual process and manual
|
|
The Bank, as per its governing framework, made NPA provisions
|
controls in relation to identification and classification viz., sub-
|
|
based on Management's assessment of the degree of impairment of
|
standard, doubtful and loss with reference to their days-past-
|
|
the advances subject to and guided by minimum provisioning levels
prescribed under RBI guidelines.
|
due (DPD) status and provisioning pertaining to NPA;
|
|
Key Audit Matters
|
Auditor's Response
|
|
The identification, classification and provisioning of NPAs has been
|
• Test checked advances to examine the validity of the recorded
|
|
identified as a Key Audit Matter as the Bank has significant credit
|
amounts, loan documentation, examined the statement of
|
|
risk exposure to a large number of borrowers across various sectors,
|
accounts, indicators of impairment, impairment provision
|
|
products, industries and geographies and there is a high degree of
|
for non-performing advances, and compliance with asset
|
|
complexity, uncertainty and judgment involved in recoverability
|
classification and provisioning pertaining to advances.
|
|
of advances, nature of transactions and estimation of provisions
|
|
thereon and identification of accounts to be written off.
|
• Tested controls for computation of provision of NPA and its
compliance with the board approved policy and RBI regulations.
• Undertaken the walkthrough for the automated NPA system
and tested the core functionality for selected samples
considering the audit universe.
• Re-performed, for a sample of retail and corporate portfolios,
as part of our substantive audit procedures the calculation of
provisions, to determine the accuracy of the same;
• Assessed the adequacy of disclosures against the RBI
regulations.
|
|
Information Technology (IT) Systems and General Controls
|
|
The Bank's key financial accounting and reporting processes are
|
Our audit approach/procedures included the following:
|
|
highly dependent on Core Banking and Treasury Solutions and
|
|
other supporting software and hardware controls. The volume
|
• We have planned, designed and carried out the desired audit
|
|
of transactions processed and recorded is huge and hence the IT
|
procedures and sample checked, taking into consideration the
|
|
controls are required to ensure that applications process data as
|
IT systems of the Bank.
|
|
expected and that changes are made in an appropriate manner.
|
| |
• Assessment and identification of key IT applications including
|
|
The Bank's IT control framework includes automated and semi-
|
|
automated controls designed to address identified risks. IT controls
|
those identified by the management for audit trail (audit
|
|
are stated in Entity Level Controls (ELC), IT General Controls (ITGC)
|
log). Further verifying, testing, and reviewing the design and
|
|
and IT Application Controls (ITAC). Such controls contribute to risk
|
operating effectiveness of the IT system and other financial
|
|
mitigation of erroneous output data.
|
and non-financial information generated from the system on
a test check basis.
|
|
We have identified IT Controls Framework as a Key Audit Matter
|
|
as the Bank's business is highly dependent on technology. The IT
|
• Gaining understanding of IT controls framework through
|
|
environment is complex and the design and operating effectiveness
|
Walkthrough of processes. We also discussed Internal Financial
|
|
of IT controls have a direct impact on its financial reporting process.
|
Control and other assurance functions in carrying out our
|
|
Such controls provide assurance on the integrity and completeness of
|
audit procedures.
|
|
data processed through various IT applications which are used for the
|
|
preparation of financial reports.
|
• The IT audit specialists (who are integral part of audit team)
have carried out testing of effectiveness of general and
application controls.
• We also tested key automated and manual business cycle
controls and logic for system generated reports relevant
to the audit; including testing of compensating controls or
performed alternate procedures to assess whether there were
any unaddressed IT risks that would materially impact the
Financial Statements.
• In ITGC testing, on sample basis, we reviewed control areas
such as User Management, Change Management, Physical &
Environmental Security, Creation and maintenance of edit logs,
Backup and Restoration etc.
We have also carried out other audit procedures like substantive
testing, analytical procedures etc. to verify the accuracy of the data
generated from the IT system.
|
Information other than the standalone financial statements
and Auditors' Report thereon
The Bank's Management and Board of Directors are
responsible for the Other Information. The other information
comprises the Management Discussion and Analysis,
Business Responsibility and Sustainability Report, Directors'
Report forming part of the Annual Report, but does not include
the standalone financial statements, consolidated financial
statements and our auditors' report thereon and the Pillar
III Disclosures under Basel III Capital Regulation, Leverage
Ratio, Liquidity Coverage Ratio and Net Stable Funding Ratio.
The Annual Report is expected to be made available to us
after the date of this auditors' report.
Our opinion on the standalone financial statements does not
cover the other information and we do 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
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.
When we read the other information, if we conclude that
there is a material misstatement therein, we are required to
communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with
Governance for the Standalone Financial Statements
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 the
Companies (Accounting Standards) Rules, 2021 as amended
to the extent applicable, provisions of Section 29 of the
Banking Regulation Act, 1949 and the circulars and guidelines
issued by Reserve Bank of India ('RBI') from time to time,
as applicable to the Bank. This responsibility also includes
maintenance of adequate accounting records in accordance
with the provisions of the Act and the RBI Guidelines for
safeguarding of the assets of the Bank and for preventing
and detecting frauds and other irregularities; selection of the
appropriate accounting software for ensuring compliance
with applicable laws and regulations including those related
to retention of audit logs 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, 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.
The Board of Directors are also responsible for overseeing the
Bank's financial reporting process.
Auditors' Responsibilities for the Audit of the Standalone
Financial Statements
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:
• 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.
• 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 adequate
internal financial controls with reference to 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 in the standalone
financial statements made by the Management and
Board of Directors.
• Conclude on the appropriateness of the Management
and Board of Director'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 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 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 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.
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 standalone 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.
Report on other legal and regulatory requirements
1) 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 and relevant rules
issued thereunder.
2) 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) The Bank considers its key operations, with the key
applications largely integrated to the Core Banking
System, it does not require its branches to submit
any financial returns. Accordingly, our audit is
carried out centrally based on the records and data
made available to us at Head Office. During the
course of our audit, we have visited and performed
select relevant procedures at 48 branches; and
(d) The profit and loss account shows a true balance of
profit for the year then ended
3) 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;
(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
the Companies (Accounting Standard) Rules, 2021,
as amended, to the extent they are not inconsistent
with the accounting policies prescribed by RBI;
(e) on the basis of the written representations received
from the directors as on March 31, 2026 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; and
(f) 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'.
4) 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
knowledge and belief and according to the information
and explanations given to us:
(a) the Bank has disclosed the impact of pending
litigations as at March 31, 2026 on its financial
position in its standalone financial statements-
Refer Note No. 17.5.10 and 17.5.83 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
Note No. 17.5.77 read with Note No. 17.5.20 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 year
ended March 31, 2026-Refer Note No. 17.5.67 to
the standalone financial statements.
(d) (i) The management of the Bank has represented
that, to the best of its knowledge and belief,
other than as disclosed in the notes to
accounts (Refer Note No. 17.5.38), 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;
(ii) The management of the Bank has represented
that, to the best of its knowledge and belief,
other than as disclosed in the notes to accounts
(Refer Note No. 17.5.38) 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, 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
(iii) Based on such audit procedures that were
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 (i) and (ii)
above contain any material misstatement.
(e) No dividend has been declared or paid during the
year by the Bank.
(f) Based on our examination which included test
checks, the Bank has used accounting softwares
for maintaining its books of account which, along
with access management tools, as applicable, have
a feature of recording audit trail (edit log) facility
and the same has operated throughout the year for
all relevant transactions recorded in the respective
software. Further, during the course of our audit
we did not come across any instance of audit trail
feature being tampered with. Additionally, the
audit trail has been preserved by the Bank as per
the statutory requirements for record retention
5) With respect to the matter to be included in the Auditors'
Report under section 197(16) of the Act; the Bank is a
banking company as defined under Banking Regulation
Act, 1949. Accordingly, the requirements prescribed
under Section 197 of the Companies Act, 2013 (the 'act')
do not apply by virtue of Section 35B(2A) of the Banking
Regulation Act, 1949.
For G.M. Kapadia & Co. For C N K & Associates LLP
Chartered Accountants Chartered Accountants
(Registration No. 104767W) (Registration No. 101961W/ W100036)
Atul Shah Suresh Agaskar
Partner Partner
(Membership No. 039569) (Membership No. 110321)
UDIN: 26039569QLQYUA1199 UDIN: 26110321SWTRZM8755
Place: Mumbai Place: Mumbai
Date: April 18, 2026 Date: April 18, 2026
|