The State Bank of India (SBI) has classified the loan account of Anil Ambani’s Reliance Communications (RCom) as ‘fraud’, the bankrupt telecom company claimed.
Agarwal Law Associates, the legal counsel for Anil Ambani, has responded to State Bank of India’s move to classify the Reliance Communications loan account as “fraud,” stating that the firm is “shocked to receive the ex-parte order” of the bank’s Fraud Identification Committee. In its statement, the law firm said the bank has not responded to Ambani’s last communication for over a year.
Reliance Communications (RCom), part of the Anil Ambani-led Reliance Group, finds itself embroiled in further financial distress as the State Bank of India (SBI) has moved to classify its loan account as “fraud.” This development comes as RCom, once a significant player in India’s telecom sector, continues to battle a staggering debt of ₹40,400 crore as of March 2025, according to a disclosure made in April.
The move by SBI carries significant ramifications under Indian banking laws. Once an account is reported as fraudulent, it is automatically referred to enforcement agencies for criminal action. Furthermore, the borrower is effectively blacklisted, barred from securing any new financing from banks and other regulated financial institutions for an initial period of five years. This severe restriction could severely impede any potential revival efforts for RCom, which has been undergoing corporate insolvency resolution proceedings since 2019.
The SBI’s decision stems from alleged irregularities and diversion of funds related to loans taken out in 2016. The bank reportedly provided Anil Ambani and the company ample opportunities over the past two years to address these allegations, but found their responses insufficient. While RCom maintains that its insolvency proceedings offer protection from such external orders, the “fraud” classification nonetheless adds another complex layer to its already challenging financial predicament. This is not the first instance of a bank attempting such a classification, with Canara Bank having made a similar move last year, which was subsequently stayed by the Bombay High Court.
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