The LFAR, or Long Form Audit Report, is a second report that a bank's auditors give to the bank's management and board, on top of the normal audit report on the financial statements. The RBI prescribes its format. Its stated aim is to identify gaps and weak areas in how the bank runs, manages risk and complies, and to give the board an independent opinion on them.
Last reviewed: 17 October 2026. Facts checked. We opened RBI circular RBI/2020-21/33 dated 5 September 2020 on rbi.org.in. We did not open the annexures themselves, so we do not list individual LFAR questions, and we did not check whether the circular has been amended since. Confirm the current format with RBI before you start.
What the LFAR is
A bank audit produces the usual audit report on the financial statements. The LFAR is separate. It is a structured report in a format set by the RBI, and it goes to the bank, not to the public.
The RBI circular says the formats were revised because banks have changed in size, complexity, business model and risk. It did this after talking to stakeholders, including ICAI. The revised formats apply from FY 2020-21 onwards, and the older 2002 LFAR instructions were repealed.
Who it applies to
The circular is addressed to the heads of scheduled commercial banks (excluding regional rural banks), local area banks, small finance banks and payment banks. If your client is another kind of lender, do not assume the LFAR format applies. Check what its regulator requires.
Who writes it
Two sets of auditors fill it in, as the circular's annexures show.
| Annexure | Who completes it | What it is |
|---|---|---|
| Annex I | Statutory central auditors | The LFAR to bank management |
| Annex II | Branch auditors | The branch-level LFAR, with an appendix for specialised branches |
| Annex III | Branch auditors | A review of large, irregular and critical accounts |
So the central auditor's report builds on what the branch auditors found. That makes good working papers at branch level matter. Our guide to the bank branch statutory audit explains how the branch work feeds the central audit.
What it covers
We have not reproduced the annexures here, because they are long and the RBI can change them. What the circular does say is the purpose. The LFAR should help identify and assess gaps and vulnerable areas in:
- business operations,
- risk management,
- compliance, and
- how effective the bank's internal audit is.
In practice, that means the auditor answers set questions in the RBI format, with facts and observations, not just yes or no. Auditors usually draw on the same evidence they gather for the audit: loan files, exposures, system reports and internal audit work. For the wider context, see our overview of bank audits for CA firms.
LFAR versus the audit report
| Point | Audit report | LFAR |
|---|---|---|
| Reader | Members, public, regulators | Bank management and board |
| Format | Standard auditing report format | RBI-prescribed questions and annexures |
| Purpose | Opinion on the financial statements | Gaps and weak areas in operations, risk, compliance and internal audit |
| Signed by | Statutory auditors | Statutory central auditors and branch auditors, per annexure |
What happens after submission
The circular sets out the follow-up:
- The auditors submit the LFAR to the bank.
- The bank places it before its Audit Committee of the Board, or the Local Advisory Board, together with the action taken or planned on each irregularity.
- A copy of the LFAR, the agenda note and the Board's views or directions goes to the RBI's concerned Senior Supervisory Manager in the Department of Supervision. The circular says this must happen within 60 days of the auditors submitting the LFAR.
We did not confirm whether any separate submission date for the auditors still applies. Older RBI circulars have mentioned one. Ask the bank for its current audit instructions.
A short checklist for the auditor
- Read the current RBI circular and annexures, not last year's file.
- Confirm which annexure applies to your role.
- Agree the timetable with the bank, so the board can review it and meet the 60-day step.
- Collect branch auditor reports and the large, irregular and critical accounts review early.
- Link each answer to a working paper.
- Give answers the bank can act on, because the board must record action taken.
- Keep the LFAR consistent with your audit report. A gap between them draws questions.
If you want a working template, there is a LFAR bank audit template and a bank branch statutory audit checklist. Check any template against the current RBI format before use.
Frequently Asked Questions
What does LFAR stand for?
It stands for Long Form Audit Report. It is the report prescribed by the RBI for bank audits, in addition to the standard audit report.
Who prepares the LFAR in a bank audit?
Statutory central auditors complete the central report (Annex I). Branch auditors complete the branch report and the review of large, irregular and critical accounts (Annexes II and III).
Is the LFAR public?
The circular describes it as a report to bank management and the board. It does not describe it as a public document.
Does the LFAR apply to every bank?
The circular is addressed to scheduled commercial banks other than regional rural banks, local area banks, small finance banks and payment banks. Other lenders should check their own regulator.
What happens to the LFAR after the auditors submit it?
The board's audit committee reviews it with the action taken. A copy then goes to the RBI's Senior Supervisory Manager within 60 days of the auditors' submission, as the circular states.
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