State Bank of India (SBI) has decided to classify the loan account of Reliance Communications Ltd (RCom) as “fraud” and report the name of its former director, Anil D Ambani, to the Reserve Bank of India (RBI) under existing RBI guidelines. This move follows the findings of SBI’s Fraud Identification Committee (FIC), which observed multiple financial irregularities.
RCom acknowledged that it received an official letter from SBI dated June 23, 2025, which was received on June 30. This action comes after a similar move last year by Canara Bank, which had also marked RCom’s account as fraudulent—a decision that was temporarily stayed by the Bombay High Court.
Two Key Transactions Under Scrutiny
The FIC identified two major deviations related to how RCom utilised bank loans:
- A ₹250 crore loan sanctioned by Dena Bank in 2017 for short-term liabilities and statutory payments was instead transferred as an inter-corporate deposit (ICD) to Reliance Communications Infrastructure Ltd (RCIL). The management later claimed the funds were used to repay an external commercial borrowing (ECB) from BNP-Paribas.
- A ₹248 crore loan from India Infrastructure Finance Company Ltd (IIFCL), intended for capital expenditure, saw partial amounts of ₹63 crore and ₹77 crore routed through RCIL and paid to RITL and RIEL to repay existing loans. The reason for indirect routing was not explained by the management or Anil Ambani.
SBI’s committee stated that these transactions appear to involve misappropriation of funds and breach of trust.
Background and Financial Exposure
SBI had marked RCom’s account as a non-performing asset (NPA) as early as August 2016. According to the bank, RCom, along with group entities RITL and RTL, had received a cumulative ₹31,580 crore in credit. The company’s total outstanding debt stood at ₹40,413 crore as of March 2025.
Ongoing Insolvency Proceedings
Reliance Communications is currently under corporate insolvency resolution process (CIRP) as per the Insolvency and Bankruptcy Code (IBC), 2016. A resolution plan has already been approved by the committee of creditors and is pending final approval from the National Company Law Tribunal (NCLT), Mumbai Bench.
The company clarified that all loans under review predate the CIRP and are therefore subject to resolution under the approved plan or through liquidation.
IBC Provides Legal Protection During CIRP
RCom stated that under Section 32A of the IBC, it is protected from prosecution for offences committed prior to the commencement of CIRP. This includes any unlawful transactions identified during forensic audits. If the resolution plan leads to a change in management or control, the company will be legally immune from such past liabilities once the plan is approved by NCLT.
The company also confirmed that it is seeking legal counsel on the matter and will determine its next steps accordingly.
