A low bit rate digital audio coding system includes an encoder which assigns codebooks to groups of quantization indexes based on their local properties resulting in codebook application ranges that are independent of block quantization boundaries. The invention also incorporates a resolution filter bank, or a tri-mode resolution filter bank, which is selectively switchable between high and low frequency resolution modes or high, low and intermediate modes such as when detecting transient in a frame. The result is a multichannel audio signal having a significantly lower bit rate for efficient transmission or storage. The decoder is essentially an inverse of the structure and methods of the encoder, and results in a reproduced audio signal that cannot be audibly distinguished from the original signal.