1. We have audited the accompanying standalone financialstatements of IndusInd Bank Limited ('the Bank'), whichcomprise the Standalone Balance Sheet as at March 31,2026, and the Standalone Profit and Loss Account, and theStandalone Cash Flow Statement for the year then ended,and notes to the standalone financial statements, includinga summary of significant accounting policies and otherexplanatory information (together to be referred to as"standalone financial statements").
2. I n our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidstandalone financial statements give the informationrequired by Section 29 of the Banking Regulation Act, 1949as well as the Companies Act, 2013 (the 'Act') and circularsand guidelines issued by the Reserve Bank of India, in themanner so required for banking companies ('RBI Guidelines')and give a true and fair view in conformity with theaccounting principles generally accepted in India, includingthe Accounting Standards prescribed under section 133 ofthe Act, read with Companies (Accounting Standards) Rules,2021 as amended to the extent applicable, of the state ofaffairs of the Bank as at March 31, 2026, and its profit, and itscash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standardson Auditing ('SAs') specified under section 143(10) ofthe Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit ofthe standalone financial statements section of our report.
We are independent of the Bank in accordance with the Codeof Ethics issued by the Institute of Chartered Accountants ofIndia ('ICAI') together with the ethical requirements that arerelevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder,and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics.We believe that the audit evidence obtained by us is sufficientand appropriate to provide a basis for our opinion on thestandalone financial statements.
Emphasis of Matter
4. We draw attention to note 21.1 to the standalone financialstatements, which explains the status of matters relatedto accounting of derivatives, interest and fee income andother assets and other liabilities and subsequent stepsto strengthen the systems, process and related controlspertaining to the aforesaid areas and necessary steps to fixaccountability and disciplinary action against concernedofficials in these matters.
Our opinion on the standalone financial statements is notmodified with respect to the above matter.
Key Audit Matters
5. Key audit matters are those matters that, in our professionaljudgment, were of most significance in our audit of thestandalone financial statements for the year ended March31, 2026. These matters were addressed in the context ofour audit of the standalone financial statements as a whole,and in forming our opinion thereon, and we do not providea separate opinion on these matters.
We have determined the matters described below to be thekey audit matters to be communicated in our report.
Key Audit Matters (KAM)
How KAM was addressed in our Audit
Management Override of Controls
During the previous financial year, investigations/reviews initiatedby the Bank towards end of the year identified instances ofoverride of key internal controls by senior management, includingkey management personnel, resulting in control gaps and materialaccounting adjustments including prior period adjustments,which were given effect in the previous financial year. During thecurrent financial year, the Bank initiated corrective steps for theidentified discrepancies relating to control gaps.
Considering the significance of the matters identified in theprevious financial year, the inherent risk of management overrideof controls, we have continued to consider management overrideof controls as a Key Audit Matter for the financial year endedMarch 31,2026.
Our audit procedures included, but were not limited to the
following:
• Perused the Board and Audit Committee meetings minutesto understand management and governance response to thecontrol gaps identified during the previous year and recurrencethereof, if any, in the current year
• Obtained a copy of the investigation/ review reports and verifiedwhether the discrepancies noted therein have been rectified bythe Management through appropriate actions and controls,including accounting implications if any, in the standalonefinancial statements as per the applicable Accounting Standards.
• Reviewed the effectiveness of additional controls implementedby the Management on assessed control gaps includingautomation of certain processes, based on the findings in theexternal forensic investigation report and internal investigationreports. Further, we have noted that said gaps are also validatedfor closure by the Internal Audit Department of the Bank andexternal agency.
• Performed necessary audit procedures including test of detailsin response to the assessed risks.
• Performed journal entry testing using specific risk-based criteria,with specific focus on manual entries or involving high-riskaccounts to identify material misstatements, if any.
• Performed an independent reassessment of the valuation ofderivatives.
• Perused the confirmations obtained by the Bank from the headsof the various functions/areas within the Bank on verificationof certain aspects including reconciliations, with respect to thefinancial reporting to mitigate the risk arising from potentialmanagement override of controls.
Identification and Provisioning of non-performing advances (NPA)
Total Loans and Advances (Net of Provision) as at 31 March 2026 -
INR 3,15,87,13,876 (Amount in 000')
NPA as at 31 March 2026 - INR 11,09,53,469 (Amount in 000')
Provision for NPA as at 31 March 2026 - INR 7,92,59,654 (Amount in 000')
(Refer Schedule 9, Schedule 17(6) and Schedule 18 (4.1), (14.5) to the standalone financial statements)
RBI guidelines on Income Recognition and Asset Classification and
Provisioning pertaining to advances ('IRACP norms') prescribe the
prudential guidelines for identification and classification of NPAs
and the minimum provision required for such advances from time
• Obtained an understanding of, evaluated and tested the
to time and other relevant circulars, notifications and directives
design and operating effectiveness of key controls (including IT
issued by the RBI which were collectively considered by the Bank
systems/application controls) around identification of NPA and
till March 31, 2026 to classify its advances into performing and
provisioning thereon based on the extant IRACP norms on a test
non performing and make appropriate provisions thereon.
check basis.
The Bank, as per its NPA Policy, made the provision on performing
• Verified on sample basis, the Days Past Due, including their date
advances and NPA based on Management's assessment of the
of NPA identification, classification and adequacy of provisioning
degree of impairment of the advances subject to and guided by
basis collateral valuations and other qualitative information
minimum provisioning levels prescribed under the relevant RBI
available.
guidelines. Additionally, the Bank makes accelerated provision on
exposures that are not classified as NPA where stress is identified
• Reviewed controls over calculations of provision on non-
by the Bank for such borrowers.
performing advances, basis the provisioning norms, in
As the identification of NPA and provisioning thereon requires
accordance with the Board approved policy, keeping in view
considerable level of management estimation, application of
the requirement of IRACP norms.
various regulatory requirements and its significance to the overall
• Made inquiries with the Credit and Risk departments to ascertain
audit, we have identified this as a Key Audit Matter.
how various Early Warning Signal (EWS) and potential defaultshave been identified and assessed in identification of NPA/stressed accounts.
• Obtained an understanding of the accelerated provision madeby the Bank and reviewed the underlying assumptions used bythe Bank for such performing stressed loan accounts/portfolioof loan accounts.
• Performed credit assessments of sample loans showing signsof deterioration, or in areas of emerging risk (assessed againstexternal market conditions).
• Assessed the appropriateness, accuracy and adequacy of therelated presentation and disclosures in accordance with theapplicable accounting standards and requirements of RBI withrespect to NPAs in the standalone financial statements.
Information Technology (IT) Systems and Controls
The Bank has a complex IT architecture to support its day-to-
• Our Audit procedures with respect to this matter included:
day business operations. The volume of transactions processedand recorded is huge. Moreover, a transaction may be required
• Involvement of IT audit specialists as an integral part of our
to be recorded across multiple applications depending upon the
engagement team to obtain an understanding of the IT
process and each application has different rules and a different set
architecture, which includes IT environment, IT infrastructure
of user access and authority matrix.
and IT systems.
All these applications are not fully customized to take care of
• We gathered an understanding of IT applications landscape
all user's requirements. These applications are interlinked using
implemented at the Bank and changes made therein during
different technologies so that data transfer takes place on real
the year. It was followed by process understanding, mapping of
time basis or at a particular time during the day; in batches or at
applications to the same and understanding financial risks posed
a transaction level and in an automated manner or manually. TheCore Banking Solution (CBS) itself has many interfaces. All these
by people, process and technology.
data streams directly affect the financial accounting and reporting
• In IT General Control testing, on sample basis, we reviewed control
process of the Bank.
areas such as User Management, Change Management, Systems
The Bank has a process for identifying the applications where thecontrols are embedded. The Bank's IT control framework includesautomated, semi-automated and manual controls designed toaddress identified risks.
Security, cyber security, interface testing, deployment of newapplications, Incident Management, Physical & EnvironmentalSecurity, Backup and Restoration, Business Continuity and DisasterRecovery, Service Level Agreement, end of day operations, varioussubmission made to the regulator under risk based supervision.
We have identified IT systems and controls Framework as a Key
Audit Matter as the Bank's business is highly dependent on
• We carried out on sample basis, compliance tests of system
technology, high level of automation, significant number of
functionality in order to assess the accuracy thereof. We
systems being used, the IT environment is complex, and the
also carried out procedures to check effectiveness of certain
design and operating effectiveness of IT controls have a direct
automated controls, that were considered as key internal system
impact on its financial reporting process. Review of these systemsand controls is the basis for us to provide assurance on the
controls over financial reporting.
integrity and completeness of data processed through various IT
• We tested the control environment using various techniques
applications which are used for financial accounting & reporting.
such as inquiry, walkthroughs in live environment, reviewof documentation / record / reports, observation and re¬performance. We also tested few controls using negative testingtechnique and verified compensating controls and performedalternate procedures, where necessary.
Information Other than the Standalone FinancialStatements and Auditors' Report Thereon
6. The Bank's Management and Board of Directors areresponsible for the other information. The other informationcomprises the information included in the Bank's Annualreport but does not include the standalone financialstatements and our auditors' report thereon. The AnnualReport is expected to be made available to us after the dateof this auditors' report.
7. Our opinion on the standalone financial statements does notcover the other information and we do not express any formof assurance conclusion thereon.
8. I n connection with our audit of the standalone financialstatements, our responsibility is to read the other informationidentified above when it becomes available and, in doingso, consider whether the other information is materiallyinconsistent with the standalone financial statements, or ourknowledge obtained in the audit, or otherwise appears to bematerially misstated.
9. When we read the Annual Report, if we conclude thatthere is a material misstatement therein, we are required tocommunicate the matter to those charged with governanceand take appropriate action as applicable under the relevantlaws and regulations.
Responsibilities of Management and Those Chargedwith Governance for the Standalone FinancialStatements
10. The Bank's Management and Board of Directors areresponsible for the matters stated in section 134(5) of theAct with respect to the preparation and presentation ofthese standalone financial statements that give a true andfair view of the financial position, financial performance, andcash flows of the Bank in accordance with the accountingprinciples generally accepted in India, including theAccounting Standards specified under section 133 of theAct, read with Companies (Accounting Standards) Rules, 2021as amended to the extent applicable, and RBI Guidelines.This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of theAct, Banking Regulation Act, 1949 and RBI Guidelines forsafeguarding of the assets of the Bank and for preventingand detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent;and design, implementation and maintenance of adequateinternal financial controls, that were operating effectively forensuring the accuracy and completeness of the accountingrecords, relevant to the preparation and presentation of thestandalone financial statements that give a true and fair viewand are free from material misstatement, whether due tofraud or error.
11. In preparing the standalone financial statements, theManagement and Board of Directors are responsible forassessing the Bank's ability to continue as a going concern,disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless theBoard of Directors either intends to liquidate the Bank or tocease operations, or has no realistic alternative but to do so.
12. The Board of Directors is also responsible for overseeing theBank's financial reporting process.
Auditors' Responsibilities for the Audit of theStandalone Financial Statements
13. Our objectives are to obtain reasonable assurance aboutwhether the standalone financial statements as a wholeare free from material misstatement, whether due to fraudor error, and to issue an auditors' report that includes ouropinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, theycould reasonably be expected to influence the economicdecisions of users taken on the basis of these standalonefinancial statements. As part of an audit in accordancewith SAs, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatementof the standalone financial statements, whether dueto fraud or error, design and perform audit proceduresresponsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basisfor our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, orthe override of internal control.
b. Obtain an understanding of internal control relevant tothe audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressingour opinion on whether the Bank has internal financialcontrols with reference to standalone financialstatements in place and the operating effectiveness ofsuch controls.
c. Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimatesand related disclosures made by management in thestandalone financial statements.
d. Conclude on the appropriateness of the Board ofDirectors and management's use of the going concernbasis of accounting and, based on the audit evidenceobtained, whether a material uncertainty exists relatedto events or conditions that may cast significant doubton the Bank's ability to continue as a going concern.If we conclude that a material uncertainty exists, weare required to draw attention in our auditors' reportto the related disclosures in the standalone financialstatements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditors'
report. However, future events or conditions may causethe Bank to cease to continue as a going concern.
e. Evaluate the overall presentation, structure and contentof the standalone financial statements, including thedisclosures, and whether the standalone financialstatements represent the underlying transactions andevents in a manner that achieves fair presentation.
14. We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includingany significant deficiencies in internal control that we identifyduring our audit.
15. We also provide those charged with governance with astatement that we have complied with relevant ethicalrequirements regarding independence, and to communicatewith them all relationships and other matters that mayreasonably be thought to bear on our independence, andwhere applicable, related safeguards.
16. From the matters communicated with those charged withgovernance, we determine those matters that were of mostsignificance in the audit of the standalone financial statementsfor the year ended March 31, 2026 and are therefore, the keyaudit matters. We describe these matters in our auditors'report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances,we determine that a matter should not be communicatedin our report because the adverse consequences of doingso would reasonably be expected to outweigh the publicinterest benefits of such communication.
Other Matters
17. The audit of standalone financial statements for theyear ended March 31, 2025 was conducted by one ofthe predecessor joint statutory auditors and one of thecurrent joint statutory auditors of the Bank, who expressedan unmodified opinion on those standalone financialstatements vide their report dated May 21,2025. Our opinionon the standalone financial statements is not modified inrespect of this matter.
Report on Other Legal and Regulatory Requirements
18. In our opinion, the Standalone Balance Sheet and theStandalone Profit and Loss Account have been drawn up inaccordance with the provisions of Section 29 of the BankingRegulation Act, 1949 and Section 133 of the Act and relevantrules issued thereunder.
19. As required by sub-section (3) of section 30 of the BankingRegulation Act, 1949, we report that:
a. we have sought and obtained all the information andexplanations which, to the best of our knowledge andbelief, were necessary for the purpose of our audit andhave found them to be satisfactory;
b. the transactions of the Bank, which have come to ournotice, have been within the powers of the Bank; and
c. since the key operations of the Bank are automated withthe key applications integrated to the core bankingsystems, the audit is carried out centrally as all the
necessary records and data required for the purposes ofour audit are available therein. Nevertheless, as part ofour audit, we have visited 49 branches to examine therecords maintained at such branches and performedrelevant 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 andexplanations which to the best of our knowledge andbelief were necessary for the purposes of our audit;
b. In our opinion, proper books of account as required bylaw have been kept by the Bank so far as it appears fromour examination of those books, except for the mattersstated in the paragraph 21(h) below on reporting underRule 11 (g);
c. The Standalone Balance Sheet, the Standalone Profitand Loss Account and the Standalone Cash FlowStatement dealt with by this Report are in agreementwith the books of account;
d. In our opinion, the aforesaid standalone financialstatements comply with the Accounting Standardsspecified under Section 133 of the Act, read withrelevant rules thereunder, to the extent they are notinconsistent with the applicable circulars, directionsand guidelines prescribed by the RBI;
e. On the basis of the written representations receivedfrom the directors and taken on record by the Boardof Directors, none of the directors is disqualified as onMarch 31, 2026 from being appointed as a director interms of Section 164(2) of the Act;
f. With respect to the maintenance of accounts and othermatters connected therewith, reference is made toour comment in paragraph 20(b) above on reportingunder Section 143(3)(b) and paragraph 21(h) below onreporting under Rule 11(g) of the Companies (Audit andAuditors) Rules, 2014 (as amended);
g. With respect to the adequacy of the internal financialcontrols with reference to standalone financialstatements of the Bank and the operating effectivenessof such controls, refer to our separate Report in'Annexure A';
21. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules, 2014, in our opinion and to thebest of our information and according to the explanationsgiven to us:
a. The Bank has disclosed the impact of pending litigationson its financial position in its standalone financialstatements - Refer schedule 12, 17(17) and 18(15.3) tothe standalone financial statements;
b. The Bank has made provision, as required under theapplicable law or accounting standards, for materialforeseeable losses, if any, on long-term contractsincluding derivative contracts - Refer schedule 17(5),
17(17), 18(3), 18(4.1) and 18(15.3) to the standalonefinancial statements;
c. There has been no delay in transferring amounts,required to be transferred, to the Investor Educationand Protection Fund by the Bank during the financialyear ended March 31, 2026 - Refer schedule 18(15.5);
d. The Management has represented that, to the best ofit's knowledge and belief, other than as disclosed inthe schedule 18(15.15)(1) to the standalone financialstatements, no funds have been advanced or loaned orinvested (either from borrowed funds or share premiumor any other sources or kind of funds) by the Bank toor in any other persons or entities, including foreignentities ('Intermediaries'), with the understanding,whether recorded in writing or otherwise, that theIntermediary shall, directly or indirectly lend or investin other persons or entities identified in any mannerwhatsoever by or on behalf of the Bank ('UltimateBeneficiaries') or provide any guarantee, security orthe like on behalf of the Ultimate Beneficiaries;
e. The Management has represented, that, to the best ofit's knowledge and belief, other than as disclosed inthe schedule 18(15.15)(2) to the standalone financialstatements, no funds have been received by the Bankfrom any persons or entities, including foreign entities('Funding Parties'), with the understanding, whetherrecorded in writing or otherwise, that the Bank shall,directly or indirectly, lend or invest in other persons orentities identified in any manner whatsoever by or onbehalf of the Funding Party ('Ultimate Beneficiaries') orprovide any guarantee, security or the like on behalf ofthe Ultimate Beneficiaries; and
f. Based on the audit procedures performed that havebeen considered reasonable and appropriate in thecircumstances, and according to the information andexplanations provided to us by the Management in thisregard, nothing has come to our notice that has causedus 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 incompliance with Section 123 of the Act; and
h. Based on our examination which included test checks,the Bank has used accounting software for maintainingits books of account (including two accountingsoftware managed and maintained by a third-partysoftware service provider), which have a feature ofrecording the audit trail (edit log) facility, except that asexplained in schedule 18(22) to the standalone financialstatements, where the audit trail feature was enabledat the database level in respect of one accountingsoftware with effect from June 13, 2025 and anotherwith effect from June 17, 2025.
Further, where enabled, the audit trail feature hasoperated for all relevant transactions recorded in theaccounting software throughout the year, except fortwo software as explained in previous para. Also, duringthe course of our audit and considering SOC reports, wedid not come across any instance of audit trail featurebeing tampered with in respect of such accountingsoftware. Additionally, the audit trail wherevermaintained, has been preserved by the Bank as per thestatutory requirements for record retention from April1, 2023, except that the logs related to database levelchanges, have been retained from April 1, 2024.
i . I n our opinion and to the best of our informationand according to the explanations given to us, the
provisions of Section 197 of the Act are not applicableto the Bank by virtue of Section 35B(2A) of the BankingRegulation Act, 1949. Accordingly, the reporting underSection 197(16) of the Act regarding payment/ provisionfor managerial remuneration in accordance withthe requisite approvals mandated by the provisionsof Section 197 read with Schedule V to the Act, isnot 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