Constitutional Alchemy
The anti-defection law was meant to end the era of the “Aaya Ram, Gaya Ram” politician. Four decades later, it has produced constitutional alchemists seeking ever newer ways to turn defection into legality.
The State Bank of India (SBI) has classified Reliance Communications (RCom) and its promoter-director Anil D. Ambani as ‘fraud’, and is in the process of lodging a complaint with the Central Bureau of Investigation (CBI), Parliament was informed on Monday.
In a written reply to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary stated that the classification was carried out on June 13, 2025, in accordance with the Reserve Bank of India’s Master Directions on Fraud Risk Management and the bank’s internal policies.
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SBI reported the fraud classification to the RBI on June 24, 2025, and is in the process of filing a complaint with the CBI. Subsequently, on July 1, the Resolution Professional of Reliance Communications informed the Bombay Stock Exchange (BSE) of the development, in compliance with disclosure norms.
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According to the government, SBI’s total exposure to RCom includes ₹2,227.64 crore in fund-based outstanding (including accrued interest and expenses since August 26, 2016). In addition, it includes ₹786.52 crore in non-fund-based bank guarantees.
Reliance Communications is undergoing a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. A resolution plan was approved by the Committee of Creditors and filed before the National Company Law Tribunal (NCLT), Mumbai, on March 6, 2020. Final approval is still awaited.
SBI has also initiated personal insolvency proceedings under the IBC against Anil Ambani, which are currently being heard by the NCLT, Mumbai.
The bank had previously classified the account and Ambani as ‘fraud’ on November 10, 2020, and filed a complaint with the CBI on January 5, 2021. However, the complaint was returned following a Delhi High Court stay order dated January 6, 2021.
Following a Supreme Court judgment in State Bank of India & Others vs Rajesh Agarwal & Others (March 27, 2023), which directed banks to provide borrowers an opportunity to respond before classifying them as fraud, SBI reversed the fraud tag on September 2, 2023.
After following the revised due process under the RBI’s circular dated July 15, 2024, the bank reclassified the account as ‘fraud’ on June 13, 2025.
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