State Bank of India (SBI) has declared the loan account of Reliance Communications (RCom) as fraud, saying that the company misused the funds it had borrowed. This case goes back to 2016. RCom shared this information in a stock exchange filing on Tuesday, attaching a letter from SBI dated June 23 explaining the reasons.
According to SBI, Reliance Communications, along with its group companies Reliance Infratel (RITL) and Reliance Telecom (RTL), had taken loans worth Rs 31,580 crore from banks. However, the money was not used for the purpose mentioned in the sanction letters. Instead, a large part of the funds — Rs 13,667 crore and Rs 12,692 crore — was used for repaying other loans and paying connected parties, which is against loan terms.
As per RBI rules, once a loan is marked as fraud, the bank must inform the Reserve Bank of India (RBI) within seven days. If the fraud amount is over Rs 1 crore, the bank must file a complaint with the Central Bureau of Investigation (CBI) within 30 days after informing the RBI. This may lead to deeper investigations into the case.
Earlier, Canara Bank had also declared RCom’s loan account as fraud, but the Bombay High Court put a stay on that decision in February this year.
Reliance Communications is part of the Anil Ambani-led group. Anil Ambani is the younger brother of Mukesh Ambani, who heads Reliance Industries. As of March 2025, RCom reported a total debt of Rs 40,400 crore.
Anil Ambani Challenges SBI’s ‘Fraud’ Tag, Seeks Immediate Withdrawal
Anil Ambani’s legal team has strongly objected to State Bank of India’s decision to label Reliance Communications’ loan account as “fraud.” In a statement, Agarwal Law Associates, representing Ambani, said they were surprised to receive the bank’s order, especially since it was passed without any prior notice or hearing.
The law firm pointed out that Anil Ambani had no involvement in the company’s daily operations at the time the transactions took place, as he was only a non-executive director. They also claimed that SBI had ignored Ambani’s last communication for over a year and failed to share any documents or give him a chance to explain his side. The legal counsel has urged the bank to reverse the fraud classification immediately.
This move by SBI increases scrutiny on big corporate defaulters in India, especially in cases where bank loans may have been misused.
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