J&K Bank Audit Unmodified Despite Discrepancies: What's Next?

Jammu & Kashmir Bank Limited reported a standalone net profit of INR 2,082.46 crore and consolidated net profit of INR 2,086.25 crore for the financial year ended March 31, 2025. The audit by the Comptroller & Auditor General of India identified several matters, including an understatement of Statutory Reserves by INR 23.94 crore due to improper appropriation of depreciation from revalued assets.

The audit also highlighted an understatement of provisions by INR 2.25 crore and an overstatement of profits by INR 2.25 crore related to non-performing assets (NPAs) where security was deemed non-realisable. The bank did not disclose its accounting policy for additional provisioning for advances covered by credit guarantee schemes.

Additionally, the audit noted an incorrect disclosure regarding a net gain on investment portfolio transition, which was stated as INR 26.31 crore (net of tax INR 8.85 crore) but should have been INR 51.27 crore (net of taxes INR 17.25 crore). The Bank clarified that it had transferred a total of INR 68.52 crore to General Reserve, in accordance with RBI directions.