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 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.
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Key Audit Matter How the matter was addressed in our audit
Information Technology (IT) Systems and controls over financial reporting
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As the Bank operates on Core Banking Solution across its branches
and asset centres, the reliability and security of Information
Technology ("IT") systems plays a key role in the business operations.
Since large volume of transactions are processed daily, the IT controls
are required to ensure that applications process data as expected and
that changes are made in an appropriate manner.
IT infrastructure is critical for smooth functioning and accurate
accounting and financial reporting process.
Due to the pervasive nature and complexity of the IT environment, we
have ascertained key IT systems used in financial reporting process
and its related controls as a key audit matter.
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In assessing the controls over the IT systems of the Bank, we
involved our specialists to understand the IT control environment, IT
infrastructure and IT systems.
We conducted an assessment and identified key IT systems that are
critical for accounting and financial reporting process and are relevant
for our audit and tested their internal controls. In particular:
• We obtained an understanding of the Bank's IT control
environment and key changes during the audit period that may
be relevant to the audit;
• We tested the design, implementation and operating
effectiveness of the Bank's General IT controls over the key IT
systems that are critical to accounting and financial reporting.
This included evaluation of Bank's controls for user access
management, program change management, database
management, network operations, incident management and
other IT operations performed by the Bank during the period of
audit;
• We tested key automated and manual business cycle controls
and logic for system generated reports relevant to the audit; and
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Key Audit Matter
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How the matter was addressed in our audit
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• We also tested compensating controls and performed alternate
procedures to assess whether there were any unaddressed IT
risks that would materially impact the financial statements.
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Income Recognition, Asset Classification and Provisioning on Advances (IRAC) as per the regulatory requirements.
Total Loans and Advances (Net of Provision) as at 31 March 2025: INR 92,618.27 crore Provision for Non-Performing Advances as at 31
March 2025: INR 2,194.68 crore
Refer Schedule 9, Schedule 17(1) and Schedule 18 Note 11.1
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The Bank is required to comply with the Master Circular issued by
the Reserve Bank of India ('RBI') on 'Prudential Norms for Income
Recognition, Asset Classification and Provisioning pertaining
to Advances' (the' IRAC norms') and amendments thereto ("RBI
guidelines") which prescribes the norms for identification and
classification of Non-Performing Assets ('NPAs') and the minimum
provision required for such assets.
The Bank is also required to apply its judgement to determine the
identification and provision required against NPAs considering various
quantitative as well as qualitative factors.
As the identification of and provisioning against NPAs requires
considerable level of management estimation, application of various
regulatory requirements and its significance to the overall audit due
to stakeholder and regulatory focus, we have identified this as a key
audit matter.
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Our audit approach included testing the design, operating
effectiveness of internal controls and substantive audit procedures
in respect of income recognition, asset classification and provisioning
pertaining to advances. In particular:
• We have evaluated and understood the Bank's internal control
system in adhering to the RBI guidelines;
• We have analysed and understood key IT systems/ applications
used and tested the design and implementation and
operational effectiveness of relevant controls in relation to
income recognition, asset classification, viz., standard, sub¬
standard, doubtful and loss with reference to RBI guidelines and
provisioning pertaining to advances; and
• We test checked advances to examine the validity and accuracy
of the recorded amounts, provision for NPAs, and compliance
with IRAC norms.
• Assessed appropriateness & the adequacy of disclosures as per
RBI guidelines relating to NPAs.
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1. We have audited the accompanying Standalone Financial
Statements of RBL Bank Limited ('the Bank'), which
comprise the Standalone Balance Sheet as at 31 March
2025, the Standalone Profit and Loss Account, and the
Standalone Cash Flow Statement for the year ended on that
date, and notes to the Standalone Financial Statements,
including a summary of the significant accounting policies
and other explanatory information ('the Standalone
Financial Statements').
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 Regulations Act, 1949, as well
as the Companies Act, 2013 ('the Act') and circulars and
guidelines issued by the Reserve Bank of India ('the RBI'),
in the manner so required for banking companies and
give a true and fair view in conformity with the Accounting
Standards prescribed under section 133 of the Act, read
with the Companies (Accounting Standards) Rules, 2021
('AS') and other accounting principles generally accepted
in India, of the State of Affairs of the Bank as at 31 March
2025, and its profit and its Cash Flows for the year ended on
that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards
on Auditing ('SAs') specified under section 143(10) of
the Act. Our responsibilities under those 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 we
have obtained is sufficient and appropriate to provide a
basis for our opinion.
Other Information
5. The Bank's Board of Directors are responsible for the
other information. The other information comprises the
information included in the Annual Report but does not
include the standalone financial statements, consolidated
financial statements and our auditor's reports thereon. The
Annual Report is expected to be made available to us after
the date of this auditor's report.
6. Our opinion on the Standalone Financial Statements does
not cover the other information and we do not express any
form of assurance conclusion thereon.
7. 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.
8. 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
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
9. 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 of these Standalone
Financial Statements that give a true and fair view of
the State of Affairs, Profit and Cash Flows of the Bank in
accordance of the Bank in accordance with the Accounting
Standards specified under section 133 of the Act read with
the Companies (Accounting Standards) Rules, 2021, and
other accounting principles generally accepted in India
and provisions of section 29 of the Banking Regulations
Act, 1949 and circulars and guidelines and issued by the
RBI from time to time ('RBI Guidelines'). 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; 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.
10. In preparing the Standalone Financial Statements, the
Management and the Board of Directors 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 the
Management and the Board of Directors either intends to
liquidate the Bank or to cease operations, or has no realistic
alternative but to do so.
11. The Board of Directors is also responsible for overseeing
the Bank's financial reporting process.
Auditor's Responsibilities for the Audit of the
Standalone Financial Statements
12. 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.
13. As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
13.1. 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.
13.2.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) the Act, we are also responsible
for expressing our opinion on whether the Bank has
adequate internal financial controls with reference to
Standalone Financial Statements and the operating
effectiveness of such controls.
13.3. Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the Management.
13.4. Conclude on the appropriateness of the 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 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.
13.5. 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 current year and are therefore the key
audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.
Other Matters
17. The Standalone Financial Statements of the Bank for
the year ended 31 March 2024, were audited by C N K &
Associates LLP and G.M. Kapadia & Co., who vide their
report dated 27 April 2024 expressed an unmodified opinion
on those Standalone Financial Statements, Accordingly
KKC & Associates LLP (Formerly Khimji Kunverji & Co
LLP) does not express any opinion on for the Standalone
Financial Statements for the year ended 31 March 2024.
Report on Other Legal and Regulatory Requirements
18. 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, based on our audit we report that:
19.1. 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;
19.2. The transactions of the Bank, which have come to our
notice during the course of our audit, have been within
the powers of the Bank; and
19.3.Since the key operations of the Bank are automated
with the key applications integrated to the core
banking system, the audit is carried out centrally, as
all the necessary records and data required for the
purposes of our audit are available therein. We have
visited 68 branches (including processing centres) to
examine the records maintained at such branches for
the purpose of our audit.
20. Further, as required by Section 143(3) of the Act based on
our audit we report, to the extent applicable, that:
20.1.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.
20.2.In our opinion, proper books of accounts as required
by law have been kept by the Bank, so far as it appears
from our examination of those books.
20.3. 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.
20.4.In our opinion, the aforesaid Standalone Financial
Statements comply with the Accounting Standards
specified under Section 133 of the Act read with the
relevant rules thereunder to the extent they are not
inconsistent with the accounting policies prescribed
by the RBI.
20.5. On the basis of the written representations received
from the directors as on 31 March 2025 taken on
record by the Board of Directors, none of the directors
are disqualified as on 31 March 2025 from being
appointed as a director in terms of Section 164(2) of
the Act
20.6. With respect to the adequacy of the internal
financial controls with reference to the Standalone
Financial Statements of the Bank and the operating
effectiveness of such controls, refer to our separate
Report in 'Annexure A'.
20.7. With respect to the other matters to be included in the
Auditor's Report in accordance with the requirements
of Section 197(16) of the Act, as amended; The Bank
is a Banking Company as defined under Banking
Regulation Act, 1949. Accordingly, the requirements
prescribed under Section 197 of the Act, do not apply.
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 (as amended),
in our opinion and to the best of our information and
according to the explanations given to us:
21.1. The Bank has disclosed the impact of pending
litigations on its financial position in its Standalone
Financial Statements - Refer Note 12 to the
Standalone Financial Statements;
21.2. 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 18(53) to
the Standalone Financial Statements;
21.3. There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Bank.
21.4. The Management has represented, to best of their
knowledge and belief, that 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.
21.5.The Management has represented, to best of their
knowledge and belief, that no funds have been
received by the Bank from any person(s) or entity(ies),
including foreign entities ('Funding Parties'), with
the understanding, whether recorded in writing or
otherwise, that the Bank shall, whether, directly or
indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of
the Funding Party ('Ultimate Beneficiaries') or provide
any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
21.6. Based on such audit procedures, that have been considered
reasonable and appropriate in the circumstances, nothing
has come to our notice that has caused us to believe that
the representation under para 21.4 and 21.5 contain any
material misstatement.
21.7. In our opinion and according to the information and
explanations given to us, the dividend declared and / or paid
during the year by the Bank is in compliance with Section
123 of the Act.
21.8. Based on our examination which included test checks, the
Bank has used an accounting software for maintaining its
books of account which has a feature of recording audit trail
(edit log) facility and the same has operated throughout the
year for all relevant transactions recorded in the 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.
For G. M. Kapadia & Co. For KKC & Associates LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration (formerly Khimji Kunverji & Co LLP)
No. 104767W ICAI Firm Registration
No. 105146W/W100621
Rajen Ashar Vinit K Jain
Partner Partner
ICAI Membership No.: 048243 ICAI Membership No.: 145911
UDIN: 25048243BMJKAE9887 UDIN: 25145911BMNQYO3869
Place: Mumbai Place: Mumbai
Date: April 25, 2025 Date: April 25, 2025
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