SBI Labels Reliance Communications Loan as “Fraud”; Anil Ambani’s Name Sent to RBI

State Bank of India (SBI) has officially declared a loan account of Reliance Communications (RCom) as fraud, marking a significant escalation in long-standing financial disputes dating back to August 2016. In a letter dated June 23, 2025 (received by RCom on June 30), SBI's Fraud Identification Committee cited irregularities such as fund diversion to related entities, breach of loan conditions, and discrepancies uncovered during forensic audits.

As required by RBI's regulatory framework, SBI will report the name of Anil Dhirajlal Ambani, RCom's former director, to the Reserve Bank of India.

Prior to this announcement, SBI had issued multiple show-cause notices in December 2023, March 2024, and September 2024, but found the bank’s concerns inadequately addressed.

RCom, currently undergoing a Corporate Insolvency Resolution Process (CIRP) since June 2019, clarified that the flagged loans predate the insolvency declaration. The company emphasized that, under Section 14 and Section 32A of the Insolvency and Bankruptcy Code (IBC), any claims or offences predating the insolvency process will be addressed through the NCLT-approved resolution plan, shielding it from immediate litigation.

This is not SBI’s first attempt. Canara Bank also flagged RCom’s accounts as fraudulent in late 2024, but a Bombay High Court stay temporarily halted that process.

SBI’s move triggers mandatory RBI actions, including notification within seven days and potential CBI referral if the fraud amount exceeds Rs 1 crore. While RCom has sought legal counsel, it maintains that the fraud classification won't materially impact its ongoing insolvency proceedings or the approved resolution plan awaiting final NCLT approval.