SBI flags Reliance Comms loan as fraud; Anil Ambani's name sent to RBI

State Bank of India's forensic audit cites fund diversion and loan violations; Reliance Communications says it is protected under the Insolvency and Bankruptcy Code

The State Bank of India (SBI) has classified the loan account of Reliance Communications Ltd (RCOM) as “fraud”, and is initiating action to report the name of Anil Dhirubhai Ambani, the company’s erstwhile director, to the Reserve Bank of India (RBI), RCOM said in a regulatory filing on Tuesday.

 

“Fraud Identification Committee of the Bank has decided to classify the loan account of Reliance Communication Limited as Fraud,” SBI stated in the letter dated June 23, 2025, enclosed with the filing. The letter, received on June 30, cites various irregularities, including potential fund diversion through related entities, including Reliance Telecom Ltd (RTL) and other group companies, and violations of loan terms that led to the fraud classification. SBI mentioned that the decision follows an examination of multiple show cause notices and forensic audits.

 

The bank noted that it is proceeding to report both the loan account and Anil Ambani’s name to the RBI, in line with the RBI’s Master Directions and Circulars.

 

Canara Bank in November 2024 had also classified the account of Reliance Communications as “fraud”, a decision that was stayed by Bombay High Court earlier this year.

 

Fraud claims predate Reliance Comms’ insolvency

This action is in connection with credit facilities availed by Reliance Communications before the commencement of its corporate insolvency resolution process (CIRP) in June 2019. Since then, the company’s affairs have been managed by Resolution Professional Anish Niranjan Nanavaty, under the supervision of the National Company Law Tribunal (NCLT), Mumbai Bench, which is currently reviewing an approved resolution plan.

 

Shielded from ‘adverse effect’ under IBC: RCOM

Reliance Communications said the company is under corporate insolvency resolution process (CIRP) from 2019. A resolution plan has been approved by creditors and awaits final approval by the National Company Law Tribunal (NCLT).

 

The credit facilities or loans referred to in the SBI communication, dated June 23, 2025, relate to the period preceding the commencement of the CIRP, it said. Under the Insolvency and Bankruptcy Code (IBC), these must be addressed through either an approved resolution plan or liquidation, the company said.

 

During the CIRP period, the company is protected from the institution, continuation of any suits, proceedings against the company, Reliance Communications mentioned.

 

In accordance with the immunity provisions under Section 32A of the IBC, upon the approval of the resolution plan by the NCLT, the company is to have immunity against any liability for any purported offences committed prior to the commencement of the CIRP, it said. In light of the recent development, the company is seeking legal advice to assess its next steps.