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The Big Four firm admitted to breaching audit requirements for the bank’s 2019 accounts, particularly regarding risk assessment and related party transactions with Mr Gupta’s larger business group GFG Alliance.

Wyelands Bank, established in 2016, was ordered by the Prudential Regulation Authority (PRA) in 2021 to repay customer deposits due to financial concerns, following a Financial Times investigation revealing that it had channelled funds into GFG Alliance.

Jonathan Hinchliffe, the PwC partner who signed off the audit, was also fined £33,412 and received a reprimand. The FRC’s deputy executive counsel, Claudia Mortimore, stated that the audit failed to properly recognise and consider the risks associated with the bank’s relationship with GFG Alliance, despite warnings from the PRA.

The FRC’s deputy executive counsel, Claudia Mortimore, said: “The audit breaches in this case highlight the importance for auditors to have a full understanding of the audited entity and its business.

“This is particularly important where there has been a change of ownership and change in the nature and scale of activities.

“In this audit, the risks around the Bank’s membership of and involvement with the GFG Alliance were not properly recognised and considered, despite clear warnings to the Bank from the PRA. This led to a number of serious failings, which had the potential to adversely affect retail depositors.”

A PwC spokesperson said: “We acknowledge and apologise that aspects of this piece of work fell short of the required standards.

“Since 2019, we have undertaken a multiyear programme to enhance audit quality and have, as a result, seen significant changes to our audit practice.”

The initial fine of £4.5mn was reduced due to PwC’s co-operation, and Mr Hinchliffe’s fine was similarly reduced from £55,000.