Bandhan Bank Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2025

1. We have audited the accompanying financial
statements of Bandhan Bank Limited (the
"Bank") which comprise the Balance Sheet as at
March 31, 2025, the Profit and Loss Account, the Cash
Flow Statement for the year then ended, and notes
to the Financial Statements including a summary of
significant accounting policies and other explanatory
information ("the Financial Statements").

2. I n our opinion and to the best of our information

and according to the explanations given to us, the
aforesaid financial statements give the information
required by the Banking Regulation Act, 1949 as well as

the Companies Act, 2013 ("the Act") and the circulars
and guidelines issued by Reserve Bank of India, in the

manner so required for banking companies and are in
conformity with the accounting principles generally
accepted in India including the accounting standards
specified under Section 133 of the Act as applicable
to banks and give a true and fair view of the state of
affairs of the Bank as at March 31, 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 Standards
are further described in the "Auditor''s Responsibilities

for the Audit of 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 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.

Key audit matters

4. Key audit matters are those matters that, in our
professional judgment, were of most significance in

our audit of the Financial Statements of the current
year. These matters were addressed in the context of
our audit of the 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:

Identification and Provisioning of Non-performing Advances (NPA):

Total NPA as at March 31, 2025: ?6,435.56 crore
Provision for NPA as at March 31, 2025: ?4,742.71 crore

(Refer Schedule 9, 18.6 & 18.7 to the Financial Statements)

Key Audit Matter

How our audit addressed the key audit matter

Identification of NPA and measurement of provision on account of NPA is made based on the assessment of various criteria stipulated in the Reserve Bank of India (''RBI'') guidelines on ''Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to advances'' (''IRACP''). The Bank is also required to apply its judgement to determine the identification and provision required against NPAs by applying quantitative as well as qualitative factors. The risk of identification of NPAs is affected by factors like stress and liquidity concerns in certain sectors. The provision against advances is based on criteria such as past due status, out of order status etc. The provision in respect of such NPAs are made based on ageing and classification of NPAs, recovery estimates, value of security, nature of loan products and other qualitative factors and is subject to minimum provisioning levels prescribed by the RBI and approved policy of the bank in this regard. In addition to this, for restructured accounts, provision is made for erosion/ diminution in fair value of restructured loans, in accordance with the RBI guidelines. Further, NPA classification is made borrower wise whereby if one facility of the borrower becomes NPA then all facilities of such a borrower will be treated as NPA.

• Tested the design and operating effectiveness of key controls (including application controls) over approval, recording, monitoring, and recovery of loans, monitoring overdue/ stressed accounts, identification of NPA, provision for NPA, and valuation of security including collateral. Testing of Application controls includes testing of automated controls, reports and system reconciliations. • Evaluated the governance process and tested controls over calculations of provision on non-performing advances, basis of provisioning in accordance with the Board approved policy. • Selected the borrowers based on quantitative and qualitative risk factors for their assessment of appropriate classification as NPA including computation of overdue ageing to assess its correct classification and provision amount as per the IRACP norms and Bank policy.

Key Audit Matter	How our audit addressed the key audit matter
We have identified ''Identification of NPA and	Performed other substantive procedures including but not
Provisioning on Advances'' as a key audit matter in view of	limited to the following:
the significant level of estimation involved, as well as the	• Selected sample of performing loans and assessed them
stringent compliances laid down by the RBI in this regard.	independently as to whether these should be classified as NPA; • For sample selected, examined the security valuation, financial statements and other qualitative information of the borrowers; • Considered the accounts reported by the Bank and other Banks as Special Mention Accounts ("SMA") in RBI''s Central Repository of Information on Large Credits (CRILC) to identify stress; • Performed inquiries with the credit and risk departments to ascertain if there were indicators of stress or an occurrence of an event of default in a particular loan account or any product category which needs to be considered as NPA; • Assessed the appropriateness of asset classification and adequacy of related provisioning by performing procedures such as computation of overdue ageing, assessment of borrower level, NPA identification and verification of applicable provision rates as per IRACP norms and Bank''s Policy on test check basis; and assessed the adequacy of disclosures against the relevant accounting standards and RBI requirements relating to NPAs. • We communicated the observations arising out of our above procedures with those charged with governance and the management. The resultant modifications in IT procedures to improve financial and operating controls have been implemented or expected to be implemented in the near future. In the meanwhile, the management has made compensating computations through specific manual or other off system exercises to which we have applied audit tests, where necessary.
Information Technology ("IT") Systems and Controls impacting Financial Reporting
Key Audit Matter	How our audit addressed the key audit matter
The Bank has a complex IT architecture to support its day-	Our procedures with respect to this matter included the
to-day business operations. High volume of transactions are	following:
processed and recorded on single or multiple applications.	In assessing the controls over the IT systems of the Bank, we
The reliability and security of IT systems plays a key role in	involved our technology specialists to obtain an understanding of
the business operations of the Bank. Since large volume of	the IT environment, IT infrastructure and IT systems. We evaluated
transactions are processed daily, the IT controls are required	and tested relevant IT general controls over the "in-scope" IT
to ensure that applications process data as expected and	systems and IT dependencies identified as relevant for our audit
that changes are made in an appropriate manner.	of the financial statements and financial reporting process of the
Appropriate IT general controls and application controls	Bank. On such "in-scope" IT systems, we have tested key IT general
are required to ensure that such IT systems are able to	controls with respect to the following domains:
process the data, as required, completely, accurately and	• Program change management, which includes that program
consistently for reliable financial reporting.	changes are moved to the production environment as per defined procedures and relevant segregation of environment is ensured. • User access management, which includes user access provisioning, de-provisioning, access review, password management, sensitive access rights and segregation of duties to ensure that privilege access to applications, operating systems and databases in the production environment were granted only to authorised personnel.

Key Audit Matter	How our audit addressed the key audit matter
We have identified ''IT systems and controls'' as key audit	• Program development, which includes controls over IT
matter because of the high level automation, significant	application development or implementation and related
number of systems being used by the management and	infrastructure, which are relied upon for financial reporting.
the complexity of the IT architecture and its impact on	In addition, understood where relevant, changes made to the
the financial reporting system.	IT landscape during the audit period. • IT operations, which includes job scheduling, monitoring and backup and recovery. We also evaluated the design and tested the operating effectiveness of relevant key IT dependencies within the key business process, which included testing automated controls, automated calculations/ accounting procedures, interfaces, segregation of duties and system generated reports, as applicable. We communicated the observations arising out of our above procedures with those charged with governance and the management. The resultant modifications in IT Procedures to improve financial and operating controls have been implemented or expected to be implemented in the near future. In the meanwhile, the management has made compensating computations through specific manual or other off system exercises to which we have applied audit tests, where necessary.

Information other than financial statements and
auditors'' report thereon

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 Financial Statements and
our auditor''s report thereon. The annual report is
expected to be made available to us after the date of
this auditor''s report.

Our opinion on the Financial Statements does not
cover the other information and we will not express
any form of assurance conclusion thereon.

In connection with our audit of the 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 Financial
Statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. When
we read the annual report, if we conclude that there
is a material misstatement therein, we are required
to communicate the matter to those charged with
governance and take appropriate action as applicable
under the relevant laws and regulations.

Responsibilities of management and those
charged with governance for the
Financial Statements

6. The Bank''s 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 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, and the provisions
of Section 29 of the Banking Regulations Act, 1949
and circulars, guidelines and directions 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 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 Financial
Statements that give a true and fair view and are free
from material misstatement, whether due to fraud
or error.

In preparing the Financial Statements, the 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
management and Board of Director 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.

Auditor''s Responsibilities for the Audit of the
Financial Statements

8. Our objectives are to obtain reasonable assurance
about whether the 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 Financial Statements.

9. 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. Under Section 143(3)
(i) of the Act, we are also responsible for expressing
our opinion on whether the Bank has internal financial
controls with reference to the 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 made by management of
the Bank.

• 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.

10. 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.

11. 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.

12. 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 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

13. The financial statements of the Bank for the year ended
March 31, 2024 were jointly audited by Singhi & Co.
and M M Nissim & Co. LLP, who vide their audit report
dated May 17, 2024 issued an unmodified opinion

on the audited financial statements. Accordingly,
V. Sankar Aiyar & Co., do not express any opinion
on the comparable figures reported in the financial
statements for the year ended March 31, 2024.

Our opinion is not modified in respect of the

above matter.

Report on other legal and regulatory requirements

14. In our opinion, 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.

15. 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) 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 at the Bank''s Head Office located
in Kolkata, as all the necessary records and
data required for the purposes of our audit are
available there. During the course of our audit,
we have visited 20 branches and 24 banking
units to examine the books of account and other
records maintained at the branch and performed
other relevant audit procedures.

16. 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, except for the matters stated in paragraph
16(h)(vi) below on reporting under Rule 11(g) of
the Companies (Audit and Auditors) Rules, 2014
(as amended) ("the Rules");

(c) The Balance Sheet, the Profit and Loss Account
and the Cash Flow Statement dealt with by
this report are in agreement with the books
of account;

(d) In our opinion, the aforesaid Financial Statements
comply with the Accounting Standards specified
under Section 133 of the Act read with Companies
(Accounting Standards) Rules 2021, to the extent

they are not inconsistent with the guidelines
prescribed by RBI;

(e) On the basis of the written representations
received from the directors as on March 31, 2025

and taken on record by the Board of Directors,
none of the directors is disqualified as on March
31, 2025 from being appointed as a director in
terms of Section 164(2) of the Act;

(f) The modifications relating to the maintenance of
accounts and other matters connected therewith,
reference is made to our remarks in paragraph
16(b) above on reporting under Section 143(3)
(b) of the act and paragraph 16(h)(vi) below on
reporting under Rule 11 (g) of the Rules;

(g) With respect to the adequacy of the internal
financial controls with reference to Financial
Statements of the Bank and the operating
effectiveness of such controls, refer to our
separate report in "Annexure A"; and

(h) 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:

i. The Bank has disclosed the impact of
pending litigations on its financial position
in its Financial Statements - Refer Schedule
12 & 18.17 to the Financial Statements;

ii. The Bank did not have any long term contract
including derivative contracts for which

there were material foreseeable losses;

iii. 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, 2025;

iv. (a) The management has represented that,

to the best of its knowledge and belief,
other than as disclosed in the Schedule

18.34 to the Financial Statements, no
funds have been advanced or loaned or
invested (either from borrowed funds
or share premium or any other sources
or kind of funds) by the Bank to or in any
other 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;

(b) The management has represented that,
to the best of its knowledge and belief,
other than as disclosed in the Schedule

18.34 to the Financial Statements,
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; and

(c) Based on such audit procedures that we
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 (a) and (b) contain any
material misstatement.

v. (a) The final dividend proposed in the

Previous Year, declared and paid by the
bank during the year is in accordance
with the Section 123 of the Act, as
applicable; and

(b) As stated in Schedule 18.3 to the

Financial Statements, the Board of
Directors of the Bank have proposed
dividend for the financial year 2024¬
25 which is subject to the approval of
the members at the ensuing Annual
General Meeting. The amount of
dividend proposed is in accordance with
Section 123 of the Act, as applicable,
until the date of this report.

vi. Based on our examination, which included
test checks, the Bank has used various
accounting software for maintaining its
books of account which have a feature
of recording audit trail (edit log) facility,
which have operated throughout the year
for all relevant transactions recorded in the
software, except;

(a) the audit trail configured at Database
level logs record only modified values in

respect of two accounting software(s).

Further, for one of these applications,
the changes to capture pre-modified
values was implemented from
March 25, 2025.

(b) the audit trail to log any direct data
changes was enabled at database level
in case of one accounting software,
from May 25, 2024.

Based on our procedures performed,
we did not observe any instance of
tampering with the audit trail except
in respect of periods and systems as
mentioned above wherein we are
unable to comment upon in absence
of audit trails. Further, the audit
trail, to the extent maintained in the
prior year, has been preserved by
the Company as per the statutory
requirements for record retention
except in case of two sunset software
discontinued during Previous Year and
one accounting software wherein audit
trail was enabled at database level
from February 18, 2024.

7. I n our opinion and to the best of our information
and according to the explanations given to us,
the provisions of Section 197 of the Act are not
applicable to the Bank by virtue of Section 35B(2A)
of the Banking Regulation Act, 1949. Accordingly, the
reporting under Section 197(16) of the Act regarding
payment/ provision for managerial remuneration in
accordance with the requisite approvals mandated by
the provisions of Section 197 read with Schedule V to
the Act, is not applicable.

For Singhi & Co. For V. Sankar Aiyar & Co.

Chartered Accountants Chartered Accountants

(Firm Registration No. 302049E) (Firm Registration No. 109208W)

Ravi Kapoor Karthik Srinivasan

Partner Partner

Membership No. 040404 Membership No. 514998

UDIN: 25040404BMLAOP6295 UDIN: 25514998BMLGKR9919

Place: Kolkata Place: Kolkata

Date: April 30, 2025 Date: April 30, 2025

---

Mar 31, 2024

Bandhan Bank Limited

Report on the Audit of the Financial Statements

Opinion

1. We have audited the accompanying financial statements of Bandhan Bank Limited (the "Bank") which comprise the Balance Sheet as at March 31, 2024, the Profit and Loss Account, the Cash Flow Statement for the year then ended, and notes to the Financial Statements including a summary of significant accounting policies and other explanatory information ("the Financial Statements").

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013 ("the Act”) and the circulars and guidelines issued by Reserve Bank of India, in the manner so required for banking companies and are in conformity with the accounting principles generally accepted in India including the accounting standards specified under Section 133 of the Act as applicable to banks and give a true and fair view of the state of affairs of the Bank as at March 31, 2024, 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 Standards are further described in the "Auditor''s Responsibilities for the Audit of 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 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.

Key audit matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements of the current year. These matters were addressed in the context of our audit of the 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:

Identification and Provisioning of Non-performing Advances (NPA):

Total NPA as at March 31, 2024: ''4,784.88 crore Provision for NPA as at March 31, 2024: ''3,437.27 crore (Refer Schedule 9, 18.6 & 18.7 to the Financial Statements)

Key Audit Matter	How our audit addressed the key audit matter
Identification of NPA and measurement of provision on account	•	Tested the design and operating effectiveness of key controls
of NPA is made based on the assessment of various criteria		(including application controls) over approval, recording,
stipulated in the Reserve Bank of India (''RBI'') guidelines on		monitoring, and recovery of loans, monitoring overdue/
''Prudential Norms on Income Recognition, Asset Classification		stressed accounts, identification of NPA, provision for NPA,
and Provisioning pertaining to advances'' (''IRACP'').		and valuation of security including collateral. Testing of
The Bank is also required to apply its judgement to determine the identification and provision required against NPAs by applying		Application controls includes testing of automated controls, reports and system reconciliations.
quantitative as well as qualitative factors. The risk of identification	•	Evaluated the governance process and tested controls over
of NPAs is affected by factors like stress and liquidity concerns in		calculations of provision on non-performing advances, basis
certain sectors.		of provisioning in accordance with the Board approved
The provision against advances is based on criteria such as past		policy.
due status, out of order status etc. The provision in respect of	•	Selected the borrowers based on quantitative and qualitative
such NPAs are made based on ageing and classification of NPAs,		risk factors for their assessment of appropriate classification
recovery estimates, value of security, nature of loan products and		as NPA including computation of overdue ageing to assess its
other qualitative factors and is subject to minimum provisioning		correct classification and provision amount as per the IRACP
levels prescribed by the RBI and approved policy of the bank in		norms and Bank policy.
this regard. In addition to this, for restructured accounts, provision is made for erosion/ diminution in fair value of restructured loans, in accordance with the RBI guidelines. Further, NPA classification	Performed other substantive procedures including but not limited to the following:
is made borrower wise whereby if one facility of the borrower	?	Selected sample of performing loans and assessed them
becomes NPA then all facilities of such a borrower will be treated		independently as to whether these should be classified as
as NPA.		NPA;
We have identified ''Identification of NPA and Provisioning on	?	For sample selected, examined the security valuation,
Advances'' as a key audit matter in view of the significant level		financial statements and other qualitative information of the
of estimation involved, as well as the stringent compliances laid		borrowers;
down by the RBI in this regard.	?	Considered the accounts reported by the Bank and other Banks as Special Mention Accounts ("SMA") in RBI''s Central Repository of Information on Large Credits (CRILC) to identify stress;
	?	Performed inquiries with the credit and risk departments to ascertain if there were indicators of stress or an occurrence of an event of default in a particular loan account or any product category which needs to be considered as NPA;
	?	Assessed the appropriateness of asset classification and adequacy of related provisioning by performing procedures such as computation of overdue ageing, assessment of borrower level, NPA identification and verification of applicable provision rates as per IRACP norms and Bank''s Policy on test check basis; and assessed the adequacy of disclosures against the relevant accounting standards and RBI requirements relating to NPAs.

Information Technology ("IT") Systems and Controls impacting Financial Reporting
Key Audit Matter	How our audit addressed the key audit matter
The Bank has a complex IT architecture to support its day-to-day business operations. High volume of transactions are processed	Our procedures with respect to this matter included the following: In assessing the controls over the IT systems of the Bank, we
and recorded on single or multiple applications.	involved our technology specialists to obtain an understanding of
The reliability and security of IT systems plays a key role in the	the IT environment, IT infrastructure and IT systems. We evaluated
business operations of the Bank. Since large volume of transactions	and tested relevant IT general controls over the "in-scope" IT
are processed daily, the IT controls are required to ensure that	systems and IT dependencies identified as relevant for our audit
applications process data as expected and that changes are made	of the financial statements and financial reporting process of
in an appropriate manner. Appropriate IT general controls and application controls are	the Bank. On such "in-scope" IT systems, we have tested key IT general controls with respect to the following domains:
required to ensure that such IT systems are able to process the	• Program change management, which includes that program
data, as required, completely, accurately and consistently for	changes are moved to the production environment as per
reliable financial reporting.	defined procedures and relevant segregation of environment is ensured.
We have identified ''IT systems and controls'' as key audit matter
because of the high level automation, significant number of	• User access management, which includes user access
systems being used by the management and the complexity of the	provisioning, de-provisioning, access review, password
IT architecture and its impact on the financial reporting system.	management, sensitive access rights and segregation of duties to ensure that privilege access to applications, operating systems and databases in the production environment were granted only to authorized personnel. • Program development, which includes controls over IT application development or implementation and related infrastructure, which are relied upon for financial reporting. In addition, understood where relevant, changes made to the IT landscape during the audit period. • IT operations, which includes job scheduling, monitoring and backup and recovery. We also evaluated the design and tested the operating effectiveness of relevant key IT dependencies within the key business process, which included testing automated controls, automated calculations/ accounting procedures, interfaces, segregation of duties and system generated reports, as applicable. We communicated with those charged with governance and management and tested a combination of compensating controls or remediated controls and/or performed alternative audit procedures, where necessary.

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 Financial Statements and our auditor''s report thereon. The annual report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the Financial Statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the 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 Financial Statements or our knowledge obtained in

the audit, or otherwise appears to be materially misstated. When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

Responsibilities of management and those charged with governance for the Financial Statements

6. The Bank''s 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 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, and the provisions of Section 29 of the Banking Regulations Act, 1949 and circulars, guidelines and directions 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 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 Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

7. In preparing the Financial Statements, the 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 management and Board of Director 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.

Auditor''s Responsibilities for the Audit of the Financial

Statements

8. Our objectives are to obtain reasonable assurance about whether the 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 Financial Statements.

9. 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. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Bank has internal financial controls with reference to the 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 made by management of the Bank.

• 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.

10. 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.

11. 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.

12. 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 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

13. In our opinion, 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.

14. 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) During the course of our audit, we have visited 22 branches and 37 banking units to examine the books of account and other records maintained at the branch and performed other relevant audit procedures. 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 at the Bank''s Head Office located in Kolkata, as all the necessary records and data required for the purposes of our audit are available there.

15. 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, except for the matters stated in paragraph 15(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended) ("the Rules");

(c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the aforesaid Financial Statements comply with the Accounting Standards specified under Section 133 of the Act read with Companies (Accounting Standards) Rules 2021, to the extent they are not inconsistent with the guidelines prescribed by RBI;

(e) On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164(2) of the Act;

(f) The modifications relating to the maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 15(b) above on reporting under Section 143(3)(b) of the act and paragraph 15(h)(vi) below on reporting under Rule 11(g) of the Rules;

(g) With respect to the adequacy of the internal financial controls with reference to Financial Statements of the

Bank and the operating effectiveness of such controls, refer to our separate report in "Annexure A"; and

(h) 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:

i. The Bank has disclosed the impact of pending litigations on its financial position in its Financial Statements -Refer Schedule 12 & 18.17 to the Financial Statements;

ii. The Bank did not have any long term contract including derivative contracts for which there were material foreseeable losses;

iii. 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, 2024;

iv. (a) The management has represented that, to the

best of its knowledge and belief, other than as disclosed in the Schedule 18.33 to the Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other 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;

(b) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the Schedule 18.33 to the Financial Statements, 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; and

(c) Based on such audit procedures that we 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 (a) and (b) contain any material misstatement.

v. (a) The final dividend proposed in the previous year,

declared and paid by the bank during the year is in accordance with the Section 123 of the Act, as applicable; and

(b) As stated in Schedule 18.3 to the Financial Statements, the Board of Directors of the Bank have proposed dividend for the financial year 2023-24 which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act, as applicable, until the date of this report.

vi. Based on our examination, which included test checks, the Bank has used various accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility, which have operated throughout the year for all relevant transactions recorded in the software, except;

(a) the audit trail feature was not enabled throughout the year at the database level in respect of two accounting software(s) to log any direct data changes and in case of one accounting software audit trail was enabled at database level from February 18, 2024;

(b) non-availability of sufficient appropriate audit evidence regarding recording of audit trail and non-disabling thereof in respect of two sunset software which were discontinued during the year (also, refer schedule 18.37 to the financial statements of the Bank).

Based on our procedures performed, we did not notice any instance of the audit trail feature being tampered with. In respect of the aforesaid databases, in the absence of audit trail for the said period, the question of our commenting on whether the audit trail was tampered with, does not arise.

16. In our opinion and to the best of our information and according to the explanations given to us, the provisions of Section 197 of the Act are not applicable to the Bank by virtue of Section 35B(2A) of the Banking Regulation Act, 1949. Accordingly, the reporting under Section 197(16) of the Act regarding payment/ provision for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act, is not applicable.

For M M Nissim & Co LLP For Singhi & Co

Chartered Accountants Chartered Accountants

(Firm Registration No. 107122W/ W100672) (Firm Registration No. 302049E)

Navin Kumar Jain Ankit Dhelia

Partner Partner

Membership No. 090847 Membership No. 069178

UDIN: 24090847BKFEHH7745 UDIN: 24069178BKFDOD6107

Place: Kolkata Place: Kolkata

Date: May 17, 2024 Date: May 17, 2024

---

Mar 31, 2023

To the Members of Bandhan Bank Limited

Report on the Audit of the Financial Statements

Opinion

1. We have audited the accompanying financial statements of Bandhan Bank Limited (the "Bank") which comprise the Balance Sheet as at March 31, 2023, and the Profit and Loss Account and the Cash Flow Statement for the year then ended, and notes to the Financial Statements including a summary of significant accounting policies and other explanatory information ("the Financial Statements").

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013 ("the Act") and the circulars and guidelines issued by Reserve Bank of India, in the manner so required for banking companies and are in conformity with the accounting principles generally accepted in India including the accounting standards specified under Section 133 of the Act as applicable to banks and give a true and fair view of the state of affairs of the Bank as at March 31, 2023, 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 Standards are further described in the "Auditor''s Responsibilities for the Audit of 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 the ethical requirements that are relevant to our audit of the 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.

Key audit matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements of the current year. These matters were addressed in the context of our audit of the 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:

Identification and Provisioning of Non-performing Advances (NPA): Total NPA as at March 31, 2023: ''5298.62 Crores Provision for NPA as at March 31, 2023: ''4070.35 Crores (Refer Schedule 9 & 18.6 to the Financial Statements)		Â
Key Audit Matter	How our audit addressed the key audit matter
Identification of NPA and measurement of provision on	•	Tested the design and operating effectiveness of key controls
account of NPA is made based on the assessment of various	Â	(including application controls) over approval, recording,
criteria stipulated in the Reserve Bank of India (''RBI'')	Â	monitoring, and recovery of loans, monitoring overdue/stressed
guidelines on ''Prudential Norms on Income Recognition,	Â	accounts, identification of NPA, provision for NPA, and valuation
Asset Classification and Provisioning pertaining to advances''	Â	of security including collateral. Testing of Application controls
(''IRACP''). The Bank is also required to apply its judgement to determine	Â	includes testing of automated controls, reports and system reconciliations.
the identification and provision required against NPAs by applying quantitative as well as qualitative factors. The risk of identification of NPAs is affected by factors like stress and	•	Evaluated the governance process and tested controls over calculations of provision on non-performing advances, basis of provisioning in accordance with the Board approved policy.
liquidity concerns in certain sectors.	•	Selected the borrowers based on quantitative and qualitative risk factors for their assessment of appropriate classification as NPA including computation of overdue ageing to assess its correct classification and provision amount as per the IRACP norms and Bank policy.

Key Audit Matter	How our audit addressed the key audit matter
The provision against advances is based on criteria such	Performed other substantive procedures including but not limited to
as past due status, out of order status etc. The provision	the following:
in respect of such NPAs are made based on ageing and	• Selected sample of performing loans and assessed them
classification of NPAs, recovery estimates, value of security, nature of loan products and other qualitative factors and is	independently as to whether these should be classified as NPA;
subject to minimum provisioning levels prescribed by the RBI	• For sample selected, examined the security valuation, financial
and approved policy of the bank in this regard. In addition to	statements and other qualitative information of the borrowers;
this, for restructured accounts, provision is made for erosion/	• Considered the accounts reported by the Bank and other Banks as
diminution in fair value of restructured loans, in accordance	Special Mention Accounts ("SMA") in RBI''s Central Repository of
with the RBI guidelines. Further, NPA classification is made borrower wise whereby if one facility of the borrower	Information on Large Credits (CRILC) to identify stress;
becomes NPA then all facilities of such a borrower will be	• Performed inquiries with the credit and risk departments to
treated as NPA.	ascertain if there were indicators of stress or an occurrence of an event of default in a particular loan account or any product
We have identified ''Identification of NPA and Provisioning on	category which needs to be considered as NPA;
Advances'' as a key audit matter in view of the significant level	• Assessed the appropriateness of asset classification and
of estimation involved, as well as the stringent compliances	adequacy of related provisioning by performing procedures
laid down by the RBI in this regard.	such as computation of overdue ageing, assessment of borrower level, NPA identification and verification of applicable provision rates as per IRACP norms and Bank''s Policy on test check basis; and assessed the adequacy of disclosures against the relevant accounting standards and RBI requirements relating to NPAs.
Information Technology ("IT") Systems and Controls impacting Financial Reporting
The Bank has a complex IT architecture to support its day-to-day business operations. High volume of transactions are processed and recorded on single or multiple applications. The reliability and security of IT systems plays a key role in the business operations of the Bank. Since large volume of transactions are processed daily, the IT controls are required to ensure that applications process data as expected and that	Our procedures with respect to this matter included the following: In assessing the controls over the IT systems of the Bank, we involved our technology specialists to obtain an understanding of the IT environment, IT infrastructure and IT systems. We evaluated and tested relevant IT general controls over the "in-scope" IT systems and IT dependencies identified as relevant for our audit of the financial statements and financial reporting process of the Bank. On such "inscope" IT systems, we have tested key IT general controls with respect
changes are made in an appropriate manner.	to the following domains:
Appropriate IT general controls and application controls are	• Program change management, which includes that program
required to ensure that such IT systems are able to process	changes are moved to the production environment as per defined
the data, as required, completely, accurately and consistently	procedures and relevant segregation of environment is ensured.
for reliable financial reporting.	• User access management, which includes user access provisioning, de-provisioning, access review, password management, sensitive
We have identified ''IT systems and controls'' as key audit	access rights and segregation of duties to ensure that privilege
matter because of the high level automation, significant	access to applications, operating systems and databases in
number of systems being used by the management and	the production environment were granted only to authorized
the complexity of the IT architecture and its impact on the financial reporting system.	personnel. • Program development, which includes controls over IT application development or implementation and related infrastructure, which are relied upon for financial reporting. In addition, understood where relevant, changes made to the IT landscape during the audit period. • IT operations, which includes job scheduling, monitoring and backup and recovery. We also evaluated the design and tested the operating effectiveness of relevant key IT dependencies within the key business process, which included testing automated controls, automated calculations/ accounting procedures, interfaces, segregation of duties and system generated reports, as applicable. We communicated with those charged with governance and management and tested a combination of compensating controls or remediated controls and/or performed alternative audit procedures, where necessary.

Other Information

5. The Bank''s Board of Directors is responsible for the other information. The other information comprises the information included in the annual report but does not include the Financial Statements and our auditor''s report thereon. The annual report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the Financial Statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the 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 Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

Responsibilities of management and those charged with governance for the Financial Statements

6. The Bank''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act, with respect to the preparation of these 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, and the provisions of Section 29 of the Banking Regulations Act, 1949 and circulars, guidelines and directions 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 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 Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

7. In preparing the 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 and Board of Director either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

8. The Board of Directors are also responsible for overseeing the Bank''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial Statements

9. Our objectives are to obtain reasonable assurance about whether the 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 Financial Statements.

10. 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. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Bank has internal financial controls with reference to the 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 made by management of the Bank.

• 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.

11. 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.

12. 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.

13. 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 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 Matter

14. The Financial Statements of the Bank for the previous year ended March 31, 2022, were jointly audited by Deloitte Haskins & Sells and M M Nissim & Co LLP, who, vide their report dated May 13, 2022, expressed an unmodified opinion on those Financial Statements.

Our opinion on the financial statements is not modified in respect of the above matter.

Report on other legal and regulatory requirements

15. In our opinion, 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.

16. 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) During the course of our audit, we have visited 29

 

branches and 50 banking units to examine the books of account and other records maintained at the branch and performed other relevant audit procedures. 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 at the Bank''s Head Office located in Kolkata, as all the necessary records and data required for the purposes of our audit are available there.

17. 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 Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the aforesaid Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, to the extent they are not inconsistent with the guidelines prescribed by RBI;

(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls with reference to Financial Statements of the Bank and the operating effectiveness of such controls, refer to our separate report in "Annexure A"; and

(g) 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:

i. The Bank has disclosed the impact of pending litigations on its financial position in its Financial Statements - Refer Schedule 12 & 18.16 to the Financial Statements;

ii. The Bank did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.;

iii. 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, 2023;

iv. (a) The management has represented that,

to the best of its knowledge and belief, other than as disclosed in the Schedule

18.31 to the Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other 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;

(b) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the Schedule

18.31 to the Financial Statements, 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; and

(c) Based on such audit procedures that we 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 (a) and (b) contain any material misstatement.

v. As stated in Schedule 18.3 to the Financial Statements, the Board of Directors of the Bank have proposed dividend for the financial year 2022-23 which is subject to the approval of

 

the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act, as applicable, until the date of this report.

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for maintaining books of account in accounting software having a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled, is applicable to the Bank only with effect from financial year beginning April 1, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.

18. In our opinion and to the best of our information and according to the explanations given to us, the provisions of Section 197 of the Act are not applicable to the Bank by virtue of Section 35B(2A) of the Banking Regulation Act, 1949. Accordingly, the reporting under Section 197(16) of the Act regarding payment/ provision for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act, is not applicable.

For M M Nissim & Co LLP

Chartered Accountants

(Firm Registration No. 107122W/ W100672)

Navin Kumar Jain

Partner

Membership No. 090847 UDIN: 23090847BGXVAV7363 Place: Kolkata Date: May 19, 2023

For Singhi & Co

Chartered Accountants (Firm Registration No. 302049E)

Ankit Dhelia

Partner

Membership No. 069178 UDIN: 23069178BGYIGJ3403 Place: Kolkata Date: May 19, 2023

---

Mar 31, 2022

To the Members of BANDHAN BANK LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of BANDHAN BANK LIMITED ("the Bank"), which comprise the Balance Sheet as at March 31, 2022, the Profit and Loss Account, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949, Companies Act, 2013 ("the Act") in the manner so required 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, ("Accounting Standards") as applicable to banks and other accounting principles generally accepted in India, of the state of affairs of the Bank as at March 31, 2022, its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under

section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibility for the Audit of the 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 financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the 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.

Sl. No.	Key Audit Matter	Auditor''s Response
1	Identification of Non-Performing Advances and Provisioning for Advances
	(Refer Schedule 9 read with Note 18.6 to the financial	Our	audit approach included testing the design, operating
	statements)	effectiveness of internal controls and substantive audit procedures
	Advances constitute a significant portion of the Bank''s assets and the quality of these advances is measured	in respect of income recognition, asset classification and provisioning pertaining to advances. In particular:
	in terms of ratio of Non-Performing Advances ("NPA")	•	We have evaluated and understood the Bank''s internal control
	to the gross advances of the Bank. The Bank has gross		system in adhering to the Relevant RBI guidelines which includes
	advances amounting to ? 98,790 crores and the gross		evaluating the governance process and tested controls over
	NPA ratio of Bank is 6.46% as at March 31, 2022.		calculations of provision on non-performing advances, basis of
	The Reserve Bank of India''s (RBI) guidelines on income		provisioning in accordance with the Board approved policy;
	recognition, asset classification and provisioning	•	We have analysed and understood key IT systems/ applications
	(''IRAC norms'') and guidelines relating to Resolution		used and tested the design and implementation as well as
	Framework for covid-19 related stress (herein after		operational effectiveness of relevant controls in relation to
	referred as "Relevant RBI guidelines") prescribes the		income recognition, asset classification, viz., standard, sub-
	norms for identification and classification of NPAs and		standard, doubtful and loss with reference to relevant RBI
	the minimum provision required for such assets.		guidelines and provisioning pertaining to advances;
		•	We test checked advances to examine the validity of the recorded amounts, underlying loan documentation and statement of accounts, indicators of impairment, impairment provision for NPAs, and compliance with IRAC norms which includes selection of borrowers based on quantitative and qualitative risk factors for their assessment of appropriate classification as NPA including computation of overdue ageing to assess its correct classification and provision amount as per extant IRACP norms and Bank policy.

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of BANDHAN BANK LIMITED ("the Bank"), which comprise the Balance Sheet as at March 31, 2022, the Profit and Loss Account, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949, Companies Act, 2013 ("the Act") in the manner so required 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, ("Accounting Standards") as applicable to banks and other accounting principles generally accepted in India, of the state of affairs of the Bank as at March 31, 2022, its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under

section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibility for the Audit of the 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 financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the 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.

Sl. No.	Key Audit Matter	Auditor''s Response
1	Identification of Non-Performing Advances and Provisioning for Advances
	(Refer Schedule 9 read with Note 18.6 to the financial	Our	audit approach included testing the design, operating
	statements)	effectiveness of internal controls and substantive audit procedures
	Advances constitute a significant portion of the Bank''s assets and the quality of these advances is measured	in respect of income recognition, asset classification and provisioning pertaining to advances. In particular:
	in terms of ratio of Non-Performing Advances ("NPA")	•	We have evaluated and understood the Bank''s internal control
	to the gross advances of the Bank. The Bank has gross		system in adhering to the Relevant RBI guidelines which includes
	advances amounting to ? 98,790 crores and the gross		evaluating the governance process and tested controls over
	NPA ratio of Bank is 6.46% as at March 31, 2022.		calculations of provision on non-performing advances, basis of
	The Reserve Bank of India''s (RBI) guidelines on income		provisioning in accordance with the Board approved policy;
	recognition, asset classification and provisioning	•	We have analysed and understood key IT systems/ applications
	(''IRAC norms'') and guidelines relating to Resolution		used and tested the design and implementation as well as
	Framework for covid-19 related stress (herein after		operational effectiveness of relevant controls in relation to
	referred as "Relevant RBI guidelines") prescribes the		income recognition, asset classification, viz., standard, sub-
	norms for identification and classification of NPAs and		standard, doubtful and loss with reference to relevant RBI
	the minimum provision required for such assets.		guidelines and provisioning pertaining to advances;
		•	We test checked advances to examine the validity of the recorded amounts, underlying loan documentation and statement of accounts, indicators of impairment, impairment provision for NPAs, and compliance with IRAC norms which includes selection of borrowers based on quantitative and qualitative risk factors for their assessment of appropriate classification as NPA including computation of overdue ageing to assess its correct classification and provision amount as per extant IRACP norms and Bank policy.

Sl. No.	Key Audit Matter	Auditor''s Response
	The Bank is required to have Board approved policy as	•	Selected samples of performing loans and assessed
	per IRACP guidelines for NPA identification and provision.		independently as to whether those should be classified as NPA;
	The Bank is also required to apply its judgement to	•	For samples selected examined the security valuation, financial
	determine the identification and provisioning for NPAs		statements and other qualitative information of the borrowers,
	by applying quantitative as well as qualitative factors.		wherever applicable;
	The provision on NPA is estimated based on ageing and classification of NPAs, recovery estimates, nature of loan product, value of security and other qualitative factors and is subject to the minimum provisioning norms	•	Considered the accounts reported by the Bank and other Banks as Special Mention Accounts ("SMA") in RBI''s Central Repository of Information on Large Credits (CRILC) to identify stress;
	specified by RBI and approved policy of the Bank in this	•	For selected samples assessed independently accounts that can
	regard.		potentially be classified as NPA;
	Additionally, the Bank carries provision on advances that	•	We obtained an understanding of implementation of the
	are not classified as NPAs including advances to certain		Regulatory Package and checked that the Bank''s board
	sectors and identified advances or group advances that		approved policy is in line with the Resolution Framework
	can potentially slip into NPA.		which includes MSME restructuring circular and Resolution
	Since the identification of NPAs and provisioning for advances is significant to the overall audit due to reasons stated above as well as stakeholder and regulatory focus, we have ascertained this as a key audit matter.		Framework for Covid- 19 related stress. On sample basis, tested that restructuring was carried out in accordance with the Resolution Framework and re-computed the provision made in accordance with the Resolution Framework.
		•	We have evaluated the adequacy of the additional provisions as prepared by the Management and checked consistency of various inputs and assumptions used by the Management to determine adequacy of the additional provisions.
		•	Assessed the adequacy of disclosures against the relevant accounting standards and RBI requirements relating to NPAs.
2	Key Information technology (IT) systems used in financial reporting process:
	As a Scheduled Commercial Bank that operates on	We	involved our IT specialists to obtain an understanding of the
	core banking solution ("CBS") across its branches and	Bank''s IT related control environment. Furthermore, we conducted
	asset centres, the reliability and security of IT systems	an	assessment and identified key IT applications, databases and
	plays a key role in the business operations. The Bank	operating systems that are relevant for our audit. For the key IT
	has a complex IT architecture to support its day-to-	systems used to prepare accounting and financial information, our
	day business operations. High volume of transactions	areas of audit focus included access security (including controls over
	is processed and recorded on single or multiple	privileged access), program change controls, database management
	applications.	and network operations. In particular:
	Accordingly, the IT controls are required to ensure that	•	We obtained an understanding of the Bank''s IT control
	applications process data as expected and that changes		environment and key changes during the audit period that may
	are made in an appropriate manner.		be relevant to the audit;
	The IT infrastructure is critical for smooth functioning of	•	We tested the design, implementation and operating
	the Bank''s business operations as well as for timely and		effectiveness of the Bank''s General IT controls over the key IT
	accurate financial accounting and reporting.		systems that are critical to financial reporting. This included
	Appropriate IT general controls and application controls are required to ensure that such IT systems are able to process the data, as required, completely, accurately and consistently for reliable financial reporting. We have identified ''IT systems and controls'' as key audit matter because of the high-level automation, significant		evaluation of Bank''s controls to evaluate segregation of duties and access rights being provisioned / modified based on duly approved requests, access for exit cases being revoked in a timely manner and access of all users being recertified access of all users being rectified during the period of audit;
	number of systems being used by the management and	•	We also tested key automated and manual business cycle
	the complexity of the IT architecture and its impact on		controls and logic for system generated reports relevant
	the financial reporting system.		to the audit; including testing of compensating controls or formed alternate procedures to assess whether there were any unaddressed IT risks that would materially impact the financial statements.

Information Other than the Financial Statements and Auditor''s Report Thereon

• The Bank''s Board of Directors is responsible for the preparation of the other information. The other information comprises the Chairman''s Statement, the Directors Report including annexures to the Directors report and Corporate Governance Report included in the Annual Report, but does not include the financial statement and our auditors report thereon and the Pillar III Disclosures under New Capital Adequacy Framework (Basel III Disclosures). The other information is expected to be made available to us after the date of this auditor''s report.

• Our opinion on the financial statements does not cover the other information and Basel III Disclosures and accordingly will not express any form of assurance conclusion thereon.

• In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our 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 as required under SA 720 (Revised) ''The Auditor''s responsibilities Relating to Other Information''.

Management''s Responsibility for the Financial Statements

The Bank''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these 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 provisions of Section 29 of the Banking Regulation Act, 1949, Accounting Standards and other accounting principles generally accepted in India and the circulars, guidelines and the directions issued by the Reserve Bank of India, from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the 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 financial reporting process of Bank.

Auditor''s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 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 financial 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 system 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 made by the 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 misstatements in the financial statements that, individually or in 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 the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements 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 Matter

The financial statements as at and for the year ended March 31, 2021, have been audited by the Deloitte Haskins & Sells, Chartered Accountants, one of the joint auditors of the Bank, whose report dated May 08, 2021 expressed an unmodified opinion on those financial statements. Accordingly, we, M M Nissim & Co LLP, Chartered Accountants do not express any opinion on the figures reported in the financial statements as at and for the year ended March 31, 2021.

Our opinion on the financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act and Section 30(3) of the Banking Regulation Act, 1949, based on our Audit, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and found them to be satisfactory.

b) In our opinion, the transactions of the Bank which have come to our notice have been within the powers of the bank.

c) As explained in the paragraph 2 below, the financial accounting system of the Bank are centralised and, therefore, accounting returns are not required to be submitted by branches.

d) 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.

e) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

f) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act as applicable to the Banks.

g) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act.

h) With respect to the adequacy of the internal financial controls with reference to financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Bank''s internal financial controls with reference to financial statements.

i) 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, in our opinion and to the best of our information and according to the explanations given to us, the entity being a banking company, section 197 of the Act related to the managerial remuneration is not applicable by virtue of Section 35B(2A) of the Banking Regulation Act, 1949.

j) 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, 2021, in our opinion and to the best of our information and according to the explanations given to us:

i. The Bank has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Schedule 18.16 to the financial statements;

ii. The Bank did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank;

iv. (a) The Management has represented that,

to the best of its knowledge and belief, as disclosed in the notes to the accounts no funds (which are material either individually or in the aggregate) 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, 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 - Refer schedule 18.32 to the financial statements.

(b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the notes to accounts, no funds (which are material either individually or in the aggregate) 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, 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 - Refer schedule 18.32 to the financial statements.

(c) Based on the audit procedures that has been 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) of Rule 11(e), as provided under (a) and (b) above, contain any material mis-statement.

v. The Bank has not declared any dividend during

the year and has not proposed final dividend for the year.

2. We report that during the course of our audit we have visited and performed select relevant procedures at 37 branches and 60 Banking Units (BU). Since the Bank considers its key operations to be automated, with the key applications largely integrated to the Core Banking System, it does not require its branches/banking units to submit any financial returns. Accordingly, our audit is carried out centrally at Head Office and Central Processing Units based on the records and data required for the purpose of Audit being made available to us.

For Deloitte Haskins & Sells

Chartered Accountants

(Firm Registration No. 117365W)

G. K. Subramaniam Partner

Membership No. 109839 UDIN: 22109839AIXBLV8224 Place: Bengaluru Date: May 13, 2022

For M M Nissim & Co LLP

Chartered Accountants

(Firm Registration No. 107122W / W100672)

Sanjay Khemani Partner

Membership No. 044577 UDIN: 22044577AIXMFU3791 Place: Mumbai Date: May 13, 2022

---

Mar 31, 2021

To the Members of BANDHAN BANK LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of BANDHAN BANK LIMITED (the "Bank"), which comprise the Balance Sheet as at March 31, 2021, the Profit and Loss Account, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949, Companies Act, 2013 ("the Act") in the manner so required 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, 2006, as amended ("Accounting Standards") as applicable to banks and other accounting principles generally accepted in India, of the state of affairs of the Bank as at March 31, 2021, its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibility for the Audit of the 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 financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Emphasis of Matter

We draw attention to Note 18.39 to the Financial Statement which fully describes that the Bank has recognised provision on loans to reflect the adverse business impact and uncertainties arising from the COVID 19 pandemic. Such estimates are based on current facts and circumstances and may not necessarily reflect the future uncertainties and events arising from the full impact of the COVID 19 pandemic.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the 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.

Sl. No.	Key Audit Matter	Auditor''s Response
1	Identification of Non-Performing Advances and provisioning for Advances
	(Refer Schedule 9 read with Note 18.39 to the financial statements) Advances constitute a significant portion of the Bank''s assets and the quality of these advances is measured in terms of ratio of Non-Performing Advances ("NPA") to the gross advances of the Bank. The Bank has net advances amounting to ''81,61,287 Lakhs as at March 31, 2021. Identification of and provisioning for non-performing assets (loans) in accordance with relevant prudential norms issued by the Reserve Bank of India (RBI) in respect of income recognition, asset classification and provisioning pertaining to advances and guidelines relating to COVID-19 Regulatory Package (herein after referred as "Relevant RBI guidelines") is a key audit matter due to level of regulatory and other stakeholders focus.	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 Relevant RBI guidelines regarding income recognition, asset classification and provisioning pertaining to advances; • We have analysed and understood key systems/ applications used and tested the design and implementation as well as operational effectiveness of relevant controls, including system generated reports and manual process and controls in relation to income
		recognition, asset classification, viz., standard, substandard, doubtful and loss with reference to relevant RBI guidelines and judgement of Honorable Supreme Court of India and provisioning pertaining to advances;

Sl. , Key Audit Matter No.	Auditor''s Response
During the year based on the RBI moratorium circulars/	• We test checked advances to examine the validity of
guidelines, the Honourable Supreme Court interim order on	the recorded amounts, loan documentation, examined
non-declaration of NPA and subsequent vacation of the same,	the statement of accounts, indicators of impairment,
the Bank had to revise its NPA workings in the month of March	impairment provision for non-performing assets, and
2021 in accordance with the RBI circular dated 7 April, 2021.	compliance with income recognition, asset classification
The Bank holds accelerated provisions of on standard assets	and provisioning pertaining to advances; and
(including restructured advances) as at March 31, 2021 against	• We have examined the implementation of supreme court
the potential impact of COVID-19.	judgements, by the Bank including evaluation of the
Further, during the current quarter the Bank has made additional provisions against the existing NPA accounts	impact on classification of NPA and tested the necessary changes made to the NPA calculation.
resulting from elevated risk observed in certain geographies	• We have evaluated the adequacy of the additional
and potential impact of COVID-19 on certain loan portfolios.	provisions as prepared by the Management and checked
The aforesaid involves significant management estimates/ judgements and hence identified as Key Audit Matter (KAM).	consistency of various inputs and assumptions used by the Management to determine adequacy of the additional provisions.

2 Key Information technology (IT) systems used in financial reporting process:
As a Scheduled Commercial Bank that operates on core banking	We involved our IT specialists to obtain an understanding of
solution ("CBS") across its branches and Door Step Service	the Bank''s IT related control environment. Furthermore, we
Centres ("DSC"), the reliability and security of IT systems plays	conducted an assessment and identified key IT applications,
a key role in the business operations. The Bank continued to	databases and operating systems that are relevant to our
be highly dependent on third party service providers for its	audit and have identified CBS and Treasury System primarily
core IT infrastructure. Since large volume of transactions are	as relevant for financial reporting. For the key IT systems
processed daily, the IT controls are required to ensure that	pertaining to CBS and treasury operations used to prepare
applications process data as expected and that changes are	accounting and financial information, our areas of audit focus
made in an appropriate manner.	included access security (including controls over privileged
The IT infrastructure is critical for smooth functioning of the Bank''s business operations as well as for timely and accurate	access), program change controls, database management and network operations. In particular:
financial accounting and reporting.	• We obtained an understanding of the Bank''s IT control
Due to the pervasive nature and complexity of the IT environment we have ascertained Key Information technology	environment and key changes during the audit period that may be relevant to the audit;
("IT") systems used in financial reporting process as a key audit	• We tested the design, implementation and operating
matter.	effectiveness of the Bank''s General IT controls over the key IT systems that are critical to financial reporting. This included evaluation of Bank''s controls to evaluate segregation of duties and access rights being provisioned / modified based on duly approved requests, access for exit cases being revoked in a timely manner and access of all users being recertified during the period of audit;
	• 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 formed alternate procedures to assess whether there were any unaddressed IT risks that would materially impact the financial statements.

Information Other than the Financial Statements and Auditor''s Report Thereon

• The Bank''s Board of Directors is responsible for the preparation of the other information. The other information comprises the Chairman''s Statement, the Directors Report including annexures to the Directors report and Corporate Governance Report included in the Annual Report, but does not include the financial statement and our auditors report thereon and the Pillar III Disclosures under New Capital Adequacy Framework (Basel III Disclosures). The other information is expected to be made available to us after the date of this auditor''s report.

• Our opinion on the financial statements does not cover the other information and Basel III Disclosures and accordingly will not express any form of assurance conclusion thereon.

• In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our 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 as required under SA 720 ''The Auditor''s responsibilities Relating to Other Information''.

Management''s Responsibility for the Financial Statements

The Bank''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these 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 provisions of Section 29 of the Banking Regulation Act ,1949, Accounting Standards and other accounting principles generally accepted in India and the circulars, guidelines and the directions issued by the Reserve Bank of India, from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the 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 financial reporting process of Bank.

Auditor''s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 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 financial 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 system 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 made by the 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 misstatements in the financial statements that, individually or in 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 the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements 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.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act and Section 30 of

the Banking Regulation Act, 1949, based on our Audit, we

report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and found them to be satisfactory.

b) In our opinion, the transactions of the Bank which have come to our notice have been within the powers of the bank.

c) As explained in the paragraph 2 below, the financial accounting system of the Bank are centralised and, therefore, accounting returns are not required to be submitted by branches.

d) 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.

e) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

f) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act as applicable to the Banks.

g) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on

March 31, 2021 from being appointed as a director in terms of Section 164(2) of the Act.

h) With respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Bank''s internal financial controls over financial reporting.

i) 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, in our opinion and to the best of our information and according to the explanations given to us, the entity being a banking company, section 197 of the Act related to the managerial remuneration is not applicable by virtue of Section 35B(2A) of the Banking Regulation Act, 1949.

j) 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:

i. The Bank has disclosed the impact of pending litigations on its financial position in its financial statements

ii. 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;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank.

2. We report that during the course of our audit we have visited and performed select relevant procedures at 36 Branches and 45 Banking Units (BU). Since the Bank considers its key operations to be automated, 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 at Head Office and Central Processing Units based on the records and data required for the purpose of Audit being made available to us.

For Deloitte Haskins & Sells

Chartered Accountants

(ICAI Reg. 117365W)

G. K. Subramaniam

(Partner)

(Membership No. 109839)

UDIN: 21109839AAAAFS9080

Place: Mumbai

Date: May 8, 2021

---

Mar 31, 2019

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Bandhan Bank Limited ("the Bank"), which comprise the Balance sheet as at March 31, 2019, the Profit and Loss Account, the Cash Flow Statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949 and the Companies Act, 2013, as amended ("the Act") in the manner so required for the banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Bank as at March 31, 2019, its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the 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 the ethical requirements that are relevant to our audit of the 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 audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Key audit matters	How our audit addressed the key audit matter
(a) Identification of Non Performing Advances and provisioning for Advances (Refer Schedule 17.4.3 to the financial statements)
Loans and advances constitute a major portion of the Bank''s	- We considered the Bank''s accounting policies for NPA
assets and the quality of the Bank''s loan portfolio is measured	identification and provisioning and assessing compliance with
in terms of the proportion of non-performing assets (NPAs) to	the prudential norms prescribed by the RBI (IRAC Norms).
the total loans and advances. As at March 31, 2019, the Bank has reported total gross loans and advances of Rs.4,023,463.28 lakhs (March 31, 2018: Rs.2,991,327.29 lakhs), gross nonperforming advances of Rs.81,955.65 lakhs (March 31, 2018: Rs.37,314.06 lakhs) and a corresponding provision for non	- Tested the operating effectiveness of the controls (including application and IT dependent controls) for classification of loans in the respective asset classes, viz., standard, sub-standard, doubtful and loss with reference to IRAC norms.
performing advances of Rs.59,123.91 lakhs (March 31, 2018:	- Performed test of details to test whether the provisioning
Rs.20, 023.68 lakhs).	rates applied for respective asset classes were in accordance
Identification and provisioning of NPAs is governed by the prudential norms prescribed by the Reserve Bank of India (RBI). These norms prescribe several criteria for a loan to be	with the Bank''s accounting policies and assessed the rates used by the management wherever such rates were higher than the minimum rates prescribed by RBI.
classified as a NPA including overdue aging.	- Performed inquiries with the credit and risk departments to ascertain if there were indicators of stress or an occurrence of an event of default in a particular loan account or any product category which need to be considered as NPA

Key audit matters	How our audit addressed the key audit matter
Given the volume and variety of loans, judgement is involved in the	-	Considered the special mention accounts (SMA) reports
application of RBI norms for classification of loans as NPA and in		submitted by the Bank to the RBI''s central repository of
view of the significance of this area to the overall audit of financial		information on large credits (CRILC) to assess whether any
statements, it has been considered as a key audit matter.		accounts from such reporting need to be considered as non-performing.
	-	Tested the Bank''s controls to identify loan accounts of a common borrower to ensure all facilities availed by a delinquent customer are classified as NPA.
	-	Reviewed the fraud listing and the fraud returns submitted by the Bank during the year to Reserve Bank of India ( RBI ) and verified that provision are as per IRAC norms
	-	Performed analytical procedures on various financial and non-financial parameters to test accounts identified as NPA.
	-	Tested the arithmetical accuracy of computation of provision for Advances.
(b) IT systems and controls
As a Scheduled Commercial Bank that operates on core	-	For testing the IT general controls and application controls,
banking solution across its branches, the reliability and security		we included specialized IT auditors as part of our audit team.
of IT systems plays a key role in the business operations. The		The specialized team also assisted in testing the accuracy of
Bank continued to be highly dependent on third party service		the information produced by the Bank''s IT systems.
providers for its core IT infrastructure. Since large volume of
transactions are processed daily, the IT controls are required	-	We tested the design and operating effectiveness of the
to ensure that applications process data as expected and that		Bank''s IT access controls over the information systems that
changes are made in an appropriate manner.		are critical to financial reporting.
The IT infrastructure is critical for smooth functioning of the	-	We tested IT general controls (logical access, changes
Bank''s business operations as well as for timely and accurate		management and aspects of IT operational controls). This
financial accounting and reporting.		included testing that requests for access to systems were reviewed and authorized.
Due to the pervasive nature and complexity of the IT
environment we have ascertained IT systems and controls as	-	We inspected requests of changes to systems for approval
a key audit matter.		and authorization. We considered the control environment relating to various interfaces, configuration and other application controls identified as key to our audit.
	-	In addition to the above, we tested the design and operating effectiveness of certain automated controls that were considered as key internal controls over financial reporting.
	-	If deficiencies were identified, we tested compensating controls or performed alternate procedures.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Bank''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the financial statements and our auditor''s report thereon.

Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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 the Board of Directors for the Financial Statements

The Bank''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, cash flows of the Bank in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949, accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to the Bank provision of section 29 of the Banking Regulation Act, 1949 and the circulars, guidelines and directions issued by 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 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 the 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the 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 Charged with Governance are also responsible for overseeing the Bank''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 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. 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 system 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 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.

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 for the financial year ended March 31, 2019 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 read with the Companies (Accounting Standards) Rules, 2006 (as amended) specified under section 133 of the Act, read with the Companies (Accounts) Rules, 2014.

2. As required sub section (3) of section 30 of the Banking Regulation Act, 1949 and the appointment letter dated August 8, 2018, 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; and

c. The financial accounting systems of the Bank are centralised and therefore, accounting returns for the purpose of preparing financial statements are not required to be submitted by the branches; we have visited 38 branches and 32 Doorstep Service Centers (DSCs) associated with the Bank branches, for the purpose of our audit.

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 Balance Sheet, the Profit and Loss Account, the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid financial statements comply with the Companies (Accounting Standards) Rules, 2006 (as amended) specified under section 133 of the Act, read with the Companies (Accounts) Rules, 2014 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, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financial reporting of the Bank with reference to these financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 1" to this report;

g. In our opinion, the entity being a banking company, the remuneration to the whole-time director during the year ended March 31, 2019 has been paid by the Bank in accordance with the provisions of Section 35B (1) of the Banking Regulation Act, 1949; and

h. 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:

i. The Bank has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 12 to the financial statements;

ii. The Bank did not have any long-term contracts, including derivative contracts, for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank.

Annexure 1 to the Independent Auditor''s Report of Even Date on the Financial Statements of Bandhan Bank Limted

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Bandhan Bank Limited ("the Bank") as of March 31, 2019 in conjunction with our audit of the financial statements of the Bank for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Bank''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Bank''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Bank''s internal financial controls over financial reporting with reference to these financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these financial statements.

Meaning of Internal Financial Controls Over Financial Reporting with Reference to these Financial Statements

A bank''s internal financial control over financial reporting with reference to these financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A bank''s internal financial control over financial reporting with reference to these financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the bank; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Bank are being made only in accordance with authorisations of management and directors of the bank; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the bank''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting with Reference to these Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting with reference to these financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Bank has, in all material respects, adequate internal financial controls over financial reporting with reference to these financial statements and such internal financial controls over financial reporting with reference to these financial statements were operating effectively as at March 31, 2019 based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S. R. Batliboi & Associates LLP

Chartered Accountants

Firm''s Registration No.: 101049W/E300004

per Amit Kabra

Partner

Membership No.: 094533

Place: Mumbai

Date: May 2, 2019

---

Mar 31, 2018

Independent Auditor''s Report

To,

The Members of Bandhan Bank Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Bandhan Bank Limited ("the Bank"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and notes to the financial statements.

Management''s Responsibility for the Financial Statements

The Bank''s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013

("the Act") with respect to the preparation of these 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 provisions of Section 29 of the Banking Regulation Act, 1949 and accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016 in so far as they apply to the Bank and the Guidelines issued by the Reserve Bank of India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Bank''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Bank''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements together with the notes thereon give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013, in the manner so required for the banking companies and give a true and fair view of the state of affairs of the Bank as at March 31, 2018, its profit and its cash flows for the year ended on that date.

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 read with Section 133 of the Companies Act, 2013 and read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016.

2. As required sub Section (3) of Section 30 of the Banking Regulation Act, 1949 and the appointment letter dated July 05, 2017, 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; and

(c) The financial accounting systems of the Bank are centralized and therefore, accounting returns for the purpose of preparing financial statements are not required to be submitted by the Bank branches; we have visited 35 branches and 25 Doorstep Service Centres (DSCs) associated with the Bank branches, for the purpose of our audit.

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 purpose 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 Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016.

(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls, refer to our separate Report in "Annexure 1" to this report;

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Bank does not have any pending litigations which would impact its financial position.

ii. The Bank did not have any long-term contracts, including derivative contracts, for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Amit Kabra

Partner

Membership Number: 94533

Place of Signature: Mumbai

Date: April 27, 2018

---

Mar 31, 2017

To,

Independent Auditor''s Report

The Members of Bandhan Bank Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Bandhan Bank Limited ("the Bank"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and notes to the financial statements.

Management''s Responsibility For the Financial Statements

The Bank''s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash Rows of the Bank in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 and accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016 in so far as they apply to the Bank and the Guidelines issued by the Reserve Bank of India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Bank''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Bank''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements together with the notes thereon give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013, in the manner so required for the banking companies and give a true and Fairview of the state of affairs of the BankasatMarch31, 2017, its profit and its cash Rows for the year ended on that date.

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 read with Section 133 of the Companies Act, 2013 and read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016 .

2. As required sub section (3) of section 30 of the Banking Regulation Act, 1949 and the appointment letter dated 22 August, 2016, 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; and

(c) The financial accounting systems of the Bank are centralized and therefore, accounting returns for the purpose of preparing financial statements are not required to be submitted by the Bank branches; we have visited 34 branches and 28 Doorstep Service Centres (DSCs) associated with the Bank branches, for the purpose of our audit.

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 purpose 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 Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016;

(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls, refer to our separate Report in "Annexure 1" to this report;

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Bank does not have any pending litigations which would impact its financial position.

ii. The Bank did not have any long-term contracts, including derivative contracts, for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank.

iv. The disclosure requirement as envisaged in Notification C.S.R 308(E) dated 30th March 2017 is not applicable to the Bank - Refer Note 18.30 to the financial statements

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

Sd/-

per Amit Kabra

Partner

Membership Number: 94533

Place of Signature: Gurgaon

Date: 26th April, 2017

---

Mar 31, 2016

To,

The Members of Bandhan Bank Limited Report on the Financial Statements

We have audited the accompanying financial statements of Bandhan Bank Limited ("the Bank"), which comprise the Balance Sheet as at 31 March 2016, the Profit and Loss Account and the Cash Flow statement for the year then ended, and a summary of significant accounting policies and notes to the financial statements.

Management''s Responsibility for the Financial Statements

The Bank’s Board of Directors are responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation of these 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 provisions of Section 29 of the Banking Regulation Act, 1949 and accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to the Bank and the Guidelines issued by the Reserve Bank of India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Bank''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the Ecymstarfces.

Bandhan Bank Limited

Auditor''s report for the year ended 31 March 2016

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Bank''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements together with the notes thereon give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013, in the manner so required for the banking companies and give a true and fair view of the state of affairs of the Bank as at 31 March 2016, its profit and its cash flows for the year ended on that date.

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 read with Section 133 of the Companies Act, 2013 and read with Rule 7 of the Companies (Accounts) Rules, 2014.

2. As required sub section (3) of section 30 of the Banking Regulation Act, 1949 and the appointment letter dated 28 April 2016, 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; and

c. The financial accounting systems of the Bank are centralised and therefore, accounting returns for the purpose of preparing financial statements are not required to be submitted by the branches; we have visited 25 branches for the purpose of our audit.

3. Further, as required by section 143(3) of the Companies Act, 2013, we further report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

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 Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

Bandhan Bank Limited

Auditor''s report for the year ended 31 March 2016

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls, refer to our separate Report in "Annexure 1" to this report; and

g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Bank does not have any pending litigations which would impact its financial positions.

ii. The Bank does not have any long-term contracts, including derivative contracts, for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank.

ANNEXURE 1 TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF BANDHAN BANK LIMTED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act”)

To the Members of Bandhan Bank Limited

We have audited the internal financial controls over financial reporting of Bandhan Bank Limited ("the Bank") as of March 31, 2016 in conjunction with our audit of the financial statements of the Bank for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Bank’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "Guidance Note"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Bank''s policies, the safeguarding of Its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Bank''s internal financial controls ovei financial reportiny based on our audit. We conducted our audit In accordance with the Guidance Note and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Bank''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Bank; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Bank are being made only in accordance with authorizations of management and directors of the Bank; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Bank''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk (hat the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedure es may deteriorate.

Opinion

In our opinion, the Bank has. in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Bank, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S. R. Batliboi & Associates

LLP Chartered Accountants

Firm registration No.: 101049W/E300004

per Amit Kabra Partner

Membership Number: 94533

Place of Signature: Kolkata

Date: 11^th May, 2016