SBI tags Reliance Communications’ loan as ‘Fraud’, names Anil Ambani in letter to RBI

The State Bank of India (SBI) has officially classified Reliance Communications’ (RCom) loan account as “fraud,” in a significant development concerning the Anil Ambani-led telecom company currently under insolvency. The decision was conveyed in a letter dated June 23, 2025, which RCom received on June 30, the company said in a regulatory filing on July 1.

“This is to inform you that the Company has received a letter dated June 23, 2025 (received on June 30, 2025) from SBI (marked to the Company and its erstwhile director – Anil Dhirajlal Ambani), inter alia, stating that SBI has decided to report the loan account of the Company as ‘fraud’ and to report the name of Anil Dhirajlal Ambani… to the RBI,” the filing stated.

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The action follows a long-drawn process initiated by the bank, which issued show-cause notices to RCom in December 2023, March 2024, and September 2024. SBI said it reviewed the company’s replies but found them unsatisfactory in addressing breaches of loan terms and explaining irregularities in account conduct. The matter was escalated to SBI’s fraud identification committee, which ultimately concluded that the loan should be reported as fraudulent under Reserve Bank of India (RBI) norms.

RCom clarified that the loans referenced by the SBI pertain to the period before the company entered into the Corporate Insolvency Resolution Process (CIRP) in 2019. It pointed out that under Section 32A of the Insolvency and Bankruptcy Code (IBC), once a resolution plan is approved by the National Company Law Tribunal (NCLT), the company is shielded from liability for past offences.

“The credit facilities or loans referred to in the SBI letter… are required to be necessarily resolved as part of a resolution plan or in liquidation, under the IBC,” RCom said. The resolution plan has already received approval from creditors but is still awaiting final clearance from the NCLT.

The company also confirmed it is seeking legal advice on the matter.

The SBI notice not only names Reliance Communications but also its former director, Anil Ambani, who is set to be reported to the RBI in line with regulatory procedures. Reliance Communications is part of the Anil Ambani-led Reliance Group and has no direct affiliation with Reliance Industries, chaired by his brother, Mukesh Ambani.

Under RBI rules, once a borrower is declared fraudulent, the account is subject to scrutiny by enforcement agencies, and the company and individuals involved are prohibited from accessing institutional credit for at least five years.

This is not the first time a public sector bank has sought to declare RCom’s account fraudulent. In November 2024, Canara Bank attempted a similar move. However, the Bombay High Court stayed the action in February 2025, citing procedural lapses, including the bank’s failure to give RCom a proper hearing as mandated by RBI guidelines.

As of March 2025, RCom disclosed a total debt of Rs 404 billion (USD 4.71 billion), underscoring the scale of liabilities involved in the resolution process.